Councils and other creditors sell £140m in claims against Icelandic bank
A group of 83 creditors – including a large number of local authorities and universities – have sold their claims against failed Icelandic bank LBI for more than £140m.
The sale was organised by the Local Government Association and run by Deutsche Bank through a competitive auction. Law firm Bevan Brittan advised the creditors and the LGA.
The sale will mean that the creditors will have recouped, on average, more than 95% of the money they had deposited with LBI (previously known as Landsbanki Islands hf).
The total estimated recoveries made by local authorities following the Icelandic banking crisis is now more than £1bn.
Bevan Brittan said the sale of the LBI claims had now “eliminated the risk of any further loss of value, for example, through depreciation of the Icelandic krona against sterling”.
The LGA and the law firm are to explore with those authorities and other clients which have not sold their outstanding claims against LBI the best opportunity for recovery of the balance of funds due to them.
Virginia Cooper, a commercial dispute resolution partner at Bevan Brittan who led on the deal with associate Wesley O'Brien, said: "This is an excellent result for the Local Government Association and the affected creditors who we have advised since 2008.
“It has been a long and frequently complicated case; our collective determination to recover as much of the deposited funds as possible has proved very successful in returning much needed funds to these councils and our other clients'."
