Our £4m tied into Icelandic collapse

Powys tax payers had £4m tied up in the Icelandic banking collapse, but the country’s Supreme Court has ruled that most of it must be now be paid back.

The county council invested in two of the country’s banks when they suffered financial collapse in 2008 but following yesterday’s victory, it was confirmed as a preferred creditor much to the relief of county hall.

Cabinet Member for Resources, Councillor Tony Thomas, told the cabinet this morning (Tuesday): “We are delighted the Icelandic Supreme Court has 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. It means we will be paid first when it comes to getting the money back and will recover almost all of the money placed on deposit with the failed Icelandic banks.

“Securing priority status in the administrations of Landsbanki and Glitnir could save council taxpayers as much as £470 million nationally. In Powys, the result means the council expects to receive 100 per cent of the money invested in Glitnir and 98 per cent of funds invested in Landsbanki.

 “This decision which comes more than three years after the banks failed is a huge victory. The way in which the LGA and our legal advisors have co-ordinated the legal action with other local authorities has minimised legal costs whilst enabling us to advance the strongest possible arguments to secure this result. The cost of the litigation to date amounts to less than one per cent of the amount we expect to recover.”