£700 million now recovered from failed Iceland banks
LGA media release 9 October 2012
Local authorities today retrieved a further £25 million of taxpayers' money from failed Icelandic bank, Landsbanki, courtesy of their hard-fought priority creditor status.
The third instalment of money means local authorities have now recovered around half of the £416 million in funds held with the bank when it collapsed in October 2008.
Local authorities are expecting the return of all of the money held with the bank after the LGA, working on behalf of the sector, coordinated legal action to ensure local authority depositors retained priority creditor status. This status means that local authorities will be among the first paid out by the bank's winding up board.
In all, local authorities have now recovered more than £700 million of the £1.04 billion held with the four Icelandic banks which failed when the global financial crisis hit. More is expected in coming months.
Sir Merrick Cockell, LGA Chairman, said: "This is another vindication of our decision to fight on behalf of our members for priority creditor status and it is very pleasing to see a further £25 million in taxpayers' money returned to the UK. We have now recovered around half of the money held with Landsbanki, alongside the lion's share of the funds held with all four banks that collapsed in 2008.
"We will continue to work with our legal representatives at Bevan Brittan and the banks' administrators to ensure the further recovery of as much of the remaining £300 million as possible. We are confident that we will receive further money in the short to medium term."
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Author: LGA Media Office
Contact: Dale Atkinson, Local Government Association Media Office, Telephone: 020 7664 3333
9 October 2012
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