Oct. 13--From his penthouse office in Mayfair, Iceland's richest man could once survey prime London assets in a vast empire that stretches to Russia and his home country in the icy waters of the North Atlantic. But for Bjorgolfur Thor Bjorgolfsson, the meltdown in the Icelandic economy has seriously evaporated much of his wealth. One source said: "At the moment it is impossible to tell whether he is still a billionaire or not."

As if the collapse of the Icelandic economy were not enough, Financial Mail can reveal that Thor, as friends call the 41-year-old entrepreneur, also faces a High Court case over a huge unpaid legal bill.

One of Thor's former business partners has delivered him a very clear bill for two million euros (£1.58 million) plus interest, claiming he is owed the cash for his role in some of Thor's biggest deals in recent years. The claim, recently issued in London's High Court by lawyer Gunnlaugur Petur Erlendsson, claims Thor still owes him huge bonuses for his advice.

It centres on three deals carried out by Novator, Thor's UK-based investment company that he runs from his offices in central London's Park Lane. Erlendsson claims he was hired by Thor in 2003 to offer legal advice and that he provided key advice on three multimillion pound deals.

The first was in 2003 when Novator bought a 70 per cent stake in Czech telecoms company Ceske Radiokomunikace for £120 million. After reorganising the group, Novator sold the stake three years later for a massive £942 million.

Erlendsson claims his legal advice was critical in reorganising the company's tax affairs, which was a major reason for its huge revaluation.

"The second deal involved Novator buyinga 65 per cent stake in Bulgarian Telecommunications Company for an undisclosed sum. In 2007 the stake was sold for £855 million.

The third transaction was an investment in Swedish phone company Elisa in 2005. The writ claims that the stake was sold in 2007 for £311 million, more than three times Novator's initial investment.

Erlendsson claims Thor agreed to pay him bonuses worth £790,000 for each of the deals to reflect his contribution. But he says he was paid only £790,000 last March and so is still owed £1.58 million plus interest.

Bjorgolfsson was unavailable to comment but his spokesman said: "We filed our defence last week and we do not accept any of Erlendsson's claims."

Thor's fortune was once estimated at more than £2 billion, but the nationalisation of Icelandic banks, in which he and his father, West Ham United owner Bjorgolfur Gudmundsson, were major shareholders, has melted much of their wealth.