Leading public services law firm Bevan Brittan has advised 83 clients (including many local authorities) and the Local Government Association, who coordinated the recovery of the councils' deposits, on the successful sale of their claims against LBI (formerly Landsbanki Islands hf) taking local authority total estimated recoveries to over £1bn.

The sale of the claims was organised by Bevan Brittan and the LGA through a competitive auction run by Deutsche Bank. These creditors will, on average, recoup more than 95 per cent of the money they originally deposited with LBI.

Bevan Brittan have been advising the Councils (along with a number of Universities and other creditors of LBI) since 2008 on the recovery of these funds as part of a collective group in conjunction with the Local Government Association (LGA) which included securing their recognition as priority claims in 2011. At the time of the collapse of the four failed Icelandic Banks (LBI, Glitnir, Heritable and Kaupthing Singer & Friedlander) Councils had just under £1.05 billion deposited. The sale has released in excess of £140m to Councils taking the total expected amount recouped by them to just over £1 billion.

Selling the claims now has eliminated the risk of any further loss of value, for example, through depreciation of the Icelandic krona against sterling. Recovery rates will differ for individual creditors but overall local authorities are expected to recoup considerably more than 90p for every £1 put into LBI, Glitnir, Heritable and Kaupthing Singer & Friedlander.

A Bevan Brittan team led by Commercial Dispute Resolution Partner Virginia Cooper and Associate Wesley O'Brien advised on all aspects of the auction including the appointment of Deutsche Bank; all documents relating to the transfer of the claims, ongoing issues relating to LBI and the liking timing of future recoveries from the Icelandic Banks.

Commenting on the sale, Virginia Cooper 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'."

Bevan Brittan and the LGA will 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.