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Council joy as it retrieves some Icelandic loss cash

By Burton Mail  |  Posted: February 05, 2014

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TOWN HALL chiefs have recouped more than 90 per cent of cash invested in an Icelandic bank before the 2008 financial crash – but are still pursuing two other creditors.

East Staffordshire Borough Council told the Mail that it had struck a deal to sell off its claims against LBI, which was formally known as Landsbanki.

The move means that the authority has now recouped 93.6 per cent of £3 million that was originally deposited with the bank before the financial crash of 2008.

Council chiefs also revealed that they were still working to recoup cash invested with Kaupthing Singer and Friedlander Ltd – a total of £5 million was invested six years ago.

A spokesman for the authority said: “East Staffordshire Borough Council has sold its claims against the insolvent estate of LBI.

“The claims were sold through a competitive auction process.

“The price at which the claims were sold was based on a reserve price set by East Staffordshire Borough Council on the basis of legal advice received from Bevan Brittan and financial advice procured by the LGA.

“The proceeds of the sale were paid in cash in pounds sterling and those funds have already been received by the council.

“The sale means that the council has recovered 93.6 per cent of the amounts that were originally deposited with LBI in 2008.

“We are obviously delighted that we have recovered a very large portion of our LBI deposits.

“The sale of our claims represents a clean break and now East Staffordshire Borough Council is no longer a creditor of LBI.”

Council leader Richard Grosvenor previously revealed that the authority was expected to recover more than £4 million of the £5 million it had invested in Icelandic banks.

The authority was among a vast number of organisations which invested into special accounts after being attracted by market leading interest rates.

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