CDC starts to claw back lost £6.5m

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ICELANDIC bank Glitnir has begun to repay £6.5million in taxpayers’ cash invested by Cherwell District Council.

The council was one of several local authorities chosen by the Icelandic Supreme Court as test cases in a legal battle involving the Local Government Association (LGA) and law firm Bevan Brittan.

Councillor Ken Atack, CDC’s lead member for financial management, said: “It has been a long, hard slog for our finance staff, the LGA and Bevan Brittan to claw back this money.

“As one of a handful of test cases, Cherwell helped lead the charge and the result will benefit all local authorities which had investments locked in Icelandic banks when they collapsed.”

He added: “Despite our success we are very conscious that the job isn’t finished. The Local Government Association and member councils will continue to work with the various winding up boards to expedite remaining payments.”

The test cases came after Glitnir’s winding up board announced in 2010 it would not offer preferential creditor status to wholesale depositors such as councils.

The district court found in favour of the councils challenging the decision. The winding up board opposed the challenge, but the Icelandic Supreme Court upheld the district court decision.