Council is part of a joint legal action in the United Kingdom relating to its investment in a group of collateralised debt obligations (CDOs) known as the Dante Series.

Dante Series noteholders are seeking a court order directing the Bank of New York Mellon, trustees of the Dante Series, to unwind the CDOs and distribute the collatoral to noteholders, instead of transferring the capital to Lehman Brothers’ United States arm.

Council last week agreed to withdraw a United States action on the advice of solicitors Piper Alderman.

Finance and audit committee chairwoman Juliet Arkwright said Council stood a better chance of success by pursing the UK action.

Cr Arkwright said counsel for the Australian councils had recommended a “Fortress England” policy, arguing that the financial products were developed and sold according to United Kingdom law and that the case should be heard in a UK court.

Cr Arkwright said if the Dante Series capital were returned to Lehman Brothers’ United States branch, it would become caught up in United States bankrupcy laws.

“It is unlikely there is anything to be gained in the US legal system,” Cr Arkwright said.