Cash back after Iceland decision

Share this article

DAVENTRY District Council (DDC) could be set to get more of the £8 million it deposited into Icelandic banks back following a court decision.

The case, bought by the Local Government Association on behalf of all local authorities, saw the decision made by an Icelandic district court on Friday April 1 to give preferred creditor status to UK depositors.

This means local authorities including DDC will get priority when the banks return money.

DDCs managing director, Ian Vincent said: “We are pleased that the judges in Iceland have heard the arguments on both sides and found in favour of UK local authorities and other UK wholesale depositors.

“This judgment means that UK local authorities’ claims have been recognised as deposits with priority status over other creditors’ claims and will be at the front of the queue when it comes to getting their money back following the collapse of the failed Icelandic banks. We hope that our opponents will accept this clear verdict.”

DDC has currently received just over £1.5 million back from the £8 million which was deposited when the crisis started in September 2008.

Mr Vincent added: “Securing priority status in the administrations of Landsbanki and Glitnir could reduce Daventry District Council’s losses by as much as £2 million.

“This money is particularly important at a time when local authorities need to maximise resources to help fund the reduction in our funding.

“The way in which we have co-ordinated the legal action in this matter with the LGA, other local authorities, universities and other wholesale depositors, has minimised legal costs for all the parties involved and provided value for money for taxpayers. The cost of the litigation to date amounts to less than one per cent of the money we expect to recover.

“If there is any further legal challenge, we will continue to co-ordinate our response with the other councils, universities and UK wholesale depositors.”

The council has also said that it is too early to say how much of the £8 million it will be getting back.