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Conservatives lost your money in Iceland

September 7, 2010 2:00 PM

Of the £18million put into Icelandic banks by Wiltshire Conservatives two years ago just £3m has been recovered.

The Council has received interim payments from the administrators of Heritable Bank totalling £3,155,805. No repayments have been received from Landsbanki. The Council claims it could eventually get a total repayment from Heritable of between 79 and 85 pence in the pound. Based on guidance from the Local Government Association and Bevan Brittan solicitors, the final total repayment from Landsbanki could be around 95 pence in the pound. However, this assumes that local authorities obtain priority status in terms of their deposits with the bank. In agreeing claims from creditors, Landsbanki Winding-up Board granted priority status to local authorities, but this decision has been challenged by a group of creditors (mainly bond holders) who are classified as general creditors. Their objections are currently the subject of litigation in the Icelandic courts. If the courts were to accept the objections and decide that priority status does not apply to local authority deposits, Wiltshire Council would be classified as a general creditor and receive a reduced total final repayment of around 38 pence in the pound.