Monday 23 March 2009
Is there a lawyer in the house?
Two little birdies have told me that this blog is very popular with the legal profession, so perhaps a learned reader could help answer a question.
Earlier this year, representatives from Barnet Council and Kent County Council met with the Administrator of the Icelandic banks to discuss our frozen investments. However, neither council will publicly discuss that meeting. According to a council spokeswoman quoted in the Barnet Press:
“Discussions are still ongoing with creditors in Iceland. We are pleased with the progress made so far and are optimistic that our deposits will be returned. The council has signed a confidentiality agreement that prevents it sharing information about its financial standing. We have access to privileged commercial information that, if we were to divulge it, could be detrimental to the position of every creditor, not just local authorities, and could potentially lay the council open to legal action.”
It appears that one creditor, or rather a group of creditors, has been allowed access to information that other creditors have not. In the UK, when a company goes into Administration, all creditors are entitled to receive the same information irrespective of the amount owed.
There are many charitable and non profit organisations who have funds deposited in Iceland and they would all like to know what is going on. Council Tax payers and other creditors are surely entitled to be given a realistic estimate of the amount of money they can expect to be returned and when this is likely to happen?
So my question for the legal profession is simply this. Is it lawful for Barnet and Kent Councils to be given information that has been denied to other creditors?
The question for taxpayers is, do we even want Barnet council representing local authorities in this matter, now that it has admitted that it deliberately broke its own investment rules?
In response to the question posed on this blog, I received a very helpful e-mail explaining that when the Icelandic banks collapsed, emergency legislation was passed allowing the Icelandic Financial Services Authority to appoint ‘Resolution Committees’ to replace the Boards of Directors. These committees are not ‘Administrators’, even though the media and the councils seem to refer to them as such, which is why they have been able to enter into confidentiality agreements.
Notwithstanding this, the failed banks held open creditor meetings in Reykjavik last month and, following a ruling by the District Court, updated information is placed on their respective web sites every 4-6 weeks.
My second question posted above remains unanswered!