Uttlesford District Council closer to recovering �2million
MORE than �2 million belonging to Uttlesford District Council (UDC), which is trapped in an Icelandic back, is a step closer to being recovered. District authorities, such as UDC, will be first on the list when the money is repaid, the Local Government As
MORE than �2 million belonging to Uttlesford District Council (UDC), which is trapped in an Icelandic back, is a step closer to being recovered.
District authorities, such as UDC, will be first on the list when the money is repaid, the Local Government Association has revealed.
Chief finance officer at UDC, Stephen Joyce, told members of the finance and administration committee that this was "the most encouraging news we have heard since the collapse".
The council invested �2.2 million in Icelandic bank, Landsbanki, in 2006 on a one-year term which was renewed for a second and final year in 2007. The investment was due to mature one week after the bank went bust.
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The troubled financial institution was taken over by the Icelandic government in October 2008 and UDC's substantial deposit has been in jeopardy ever since.
Now, all or some of the council's money could be returned because, under Icelandic law, local authorities are classed as preferential creditors.
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However, non-preferential creditors are likely to challenge this decision through the Icelandic and European courts. Mr Joyce said there was a "high degree of confidence that the current law would prevail" but the legal cases could significantly delay the time taken for any payments to be made.
It has also been confirmed that dividend payouts to preferential creditors will be between 83 per cent and 90 per cent. UDC has put in a claim for �2.65 million.
Chairman of the finance and administration committee, Robert Chambers, said: "This is good news but we still have a long way to go and I want to see the money in the bank before I will believe it.
"Realistically it is going to be a long time before any money is paid back, and if it is, then it will be done so over a period of years and not in one lump sum."
The money trapped in the Icelandic bank is the only deposit held by the council outside the British Isles.