Deniliquin Council believes it is unlikely it will receive any more money from a Lehman Brothers investment.TYLA HARRINGTON February 19, 2014 4:45am
Deniliquin Council’s Lehman Brothers collateralised debt obligation investment could be totally written off.
A $250,000 investment with the now defunct Lehman Bros, which collapsed as a result of the 2008 global financial crisis, is now valued at just $17,500.
Deniliquin Council general manger Des Bilske said it is unlikely council will be receiving any more money from the investment.
Council director of corporate services Terri Maguire, in a report to council, said one more ‘‘credit event’’ would cause the investment to be written off.
She said there is a ‘‘high possibility’’ of that credit event occurring.
‘‘Council controls are in place to reduce the risk of this (bad investment) happening again,’’ Ms Maguire’s report says.
‘‘(To mitigate the risk) future investments (will be) invested in a range of banks with no more than 20 per cent of council’s total funds invested with a single institution.
‘‘Council has taken the necessary steps to reduce the risk of losing significant investments in the future.’’
Council invested in the Lehman Brothers CDOs based on advice received from Local Government Financial Services on December 20, 2006.
The investment was arranged by Amro Rembrandt, was given an AAA rating by Standard & Poors and sold by Local Government Financial Services.
Deniliquin was one of 12 councils to join forces to form a case against LGFS, Amro Rembrandt and S&P in 2013.
The Federal Court of Australia ruled in favour of the combined councils and, as a result, Deniliquin Council was awarded $190,949.53.
Council also invested an additional $500,000 with Amro Rembrandt.
Combined with an earlier repayment of $34,465.39 in 2008, council has been able to recover $225,414.92 of the $500,000 invested directly with Rembrandt.
Neighbourhood Watch Week will start with a sizzle — a sausage sizzle to be precise — at Sevens Creek Dve in Kialla.
Victoria State Emergency Service (SES) and other emergency services are preparing for the next round of wild weather in the north-east.
It was clear blue skies last Tuesday for the official launch of the Gargarro (pronounced Ga-gar-ro) Botanic Gardens in Girgarre.
SNAKES will be coming out of hiding as the weather warms up.
KATH Bubb has been recognised for 50 years of service with the Ballendella Red Cross.
IT EXPERTISE in Kyabram has received recognition after Advance Computing won a Microsoft Australia Partner Award in the excellence in regional area customer category.
Seymour A and B-grade in season decider
Extensive rainfall in the Southern Riverina is having a negative impact on farming.
McIvor Creek – in and around Heathcote – has gone over its banks with all our recent rain, flooding streets and causing closures and detours.
Yarroweyah's Katie Anderson will be heading to Wisconsin in the United States after winning the Dairy Youth Travel Scholarship.
After a 30-year career as an accountant in Deniliquin, Peter Skipworth officially retires today.
Tuesday, August 16
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