This Is Guernsey

By Thom Ogier

THE administrators of Landsbanki Guernsey have been given a further year to complete their task.

The bank was put into administration on 7 October 2008 and Rick Garrard and Lee Manning of Deloitte were initially appointed its joint administrators for three months, but the timeframe has since been extended by the Royal Court to 6 January 2010.

The move was deemed necessary to achieve the optimal realisation of assets, says an interim report released by the joint administrators to the depositors.

‘The joint administrators continue to believe substantial additional payments will be made to customers but that it could take considerable time to realise assets to enable further payments,’ it said.

The report stated that the prospects for future distributions were dependent on the realisation of the loan portfolio, the Landsbanki Islands HF parent company and Heritable balances, any possible government support and/or possible legal actions.

Landsbanki Guernsey is owed £36m. by sister bank Heritable and has more than £52m. in loan assets supported by UK property.

‘The Heritable administrators have stated that it would be prejudicial to estimate recoveries and that the first dividend will be at the end of 2009, at the earliest, unless a sale of certain assets is achieved,’ said the administrator’s report.

Landsbanki Guernsey depositor Dave Grundy welcomed the time extension.

‘I think it’s good news. As I read it, the administrators have said that now is not the time to draw the line - they feel the next 12 months will allow a lot of things to happen.

‘They seem to think that because of the state of the market, it will take time to realise the assets. Also, there are ongoing negotiations with the UK.’

Mr Grundy said he had recently attended a meeting with other depositors at which many had expressed strong feelings. That meeting had followed the Landsbanki Guernsey Depositors’ Action Group representatives learning that the Chief Minister had ruled out their proposed solutions for getting their money back or dipping into taxpayers’ money to make up any shortfall.

‘The main topic was the meeting with Deputy Lyndon Trott - this was not well received by the depositors,’ he said. ‘There were some very angry people at the meeting and a very strong sense of injustice.’

The meeting had given him renewed hope, though, he said.

‘I feel it was an extremely positive and encouraging meeting because with these sorts of things there is usually a lot of interest at first but then it drops off, but there were around 100 people and this was our third one.’

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Article posted on 12th January, 2009 - 1.00pm