Norfolk County Council is trying to recover cash which is tied up in Icelandic banks.
Norfolk in fight to recover millions frozen in Icelandic banks
By DAN GRIMMER
Thursday, March 31, 2011
12:09 PM
The fate of millions of pounds of taxpayers’ cash which is frozen in Icelandic banks could be known within days.
Norfolk County Council is one of four councils involved in a make or break court case to recover the cash, with a judgement imminent.
The county council had £32.5m invested in three Icelandic banks which collapsed in October 2008 and had their assets frozen by administrators.
Norfolk County Council had £15m in Landsbanki, £10m in Kaupthing and £7.5m in Glitnir when the Icelandic government took them into administration.
County Hall has successfully recovered £5.5m from Kaupthing so far, with another £830,000 due in April or May.
But whether the authority will get its cash back from Glitnir and Landsbanki hinges on a crucial court case.
Norfolk, along with Kent, Wiltshire and Aylesbury Vale councils are the test cases in proceedings at Iceland’s District Court, with the action co-ordinated by the Local Government Association.
The court action revolves around a decision by Glitner’s administratorsto name local authorities as what are known as priority creditors, which means they would be at the front of the queue when it comes to the money being handed out.
But Landsbanki did not make local councils priority creditors and the LGA’s lawyers are arguing they should have been.
Hearings were held in Icelandic courts in the past months and the judge is expected to announce his verdict very shortly.
The judgement will determine whether local authorities, including councils, police and fire authorities, will get their cash back.
However, the court action is a potential gamble because, if the judge rules the councils should not be priority creditors for Landsbanki, then they would also lose their status as priority creditors for Glitnir.
And, whatever decision is reached, there are likely to be drawn-out legal appeals.
Steve Reilly, spokesman for Norfolk County Council, said: “We await the Icelandic District Court decision and will consider our next steps once we have received the judgement.”
The legal costs of the court action are being shared between the authorities trying to recoup the cash.
Breckland District Council, which had £12m tied up in Icelandic banks, has got £2.2m back, while Great Yarmouth invested £2m and has recovered £1m. They are not included in the test case action.
dan.grimmer@archant.co.uk
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4 comments
Strret lights on my road will be turned off at night to save a paltry amount of money yet millions of pounds of our money will potentially be lost because of the incompetence of people at Norfolk County Council. Will heads roll? Of course not, as these people have no sense of responsibility but are only interested in their own bank accounts.
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angry taxpayer
Thursday, March 31, 2011
Its these people that keep telling us what to do and how we should run our lives. They should just do their own job properly and leave us alone. This is a shocking inditement of how the county is run.
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Johnny Norfolk
Thursday, March 31, 2011
I live in Florida but am a Norwich native and am sad to see England becoming more and more like the US. Why must governments invest taxpayer money in other countries? The floundering economy in both countries should be bolstered by home investments, not risky foreign ones, and, in this case, someone at County Hall absolutely should be held accountable. I see the same thing on a national level here with oil - there is enough domestic oil here that we could be virtually self-sufficient, but still the government pours money into purchasing crude from OPEC, which stands to have its most profitable year ever. (Billions of dollars profit!) We are making the Middle East richer, while this country's residents are struggling to put gas in their cars!
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Lynne Walker
Thursday, March 31, 2011
It is worth remembering some facts. Only one in four local authorities chose to invest in the Icelandic banks. Of those that did, twenty percent were owed £1m or less. Norfolk County Council stands in fourth place in the league table of shame with investments of £32.5m. Only three local authorities had more at risk. That figure has grown to £34.5m now (with accrued interest added) and since October 2008 only £5.5m has been recovered. Possibly that is all that we shall see paid back. No-one has ever been held accountable within County Hall, and no-one probably ever will. But just think how many recent cuts in services could have been avoided had Norfolk County Council opted for a much less risky investment at that time, as so many other local authorities did..
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John Martin
Thursday, March 31, 2011