Court backs landlords in croft asset-stripping row

A LEGAL loophole used by estate owners to "asset strip" land ahead of potential hostile buyouts by crofters was valid, a court has ruled.

Flagship legislation gave crofting communities the right to buy whether or not owners wished to sell. Some landowners were accused of asset-stripping ahead of a takeover by setting up third-party companies to lease croft land to developers.

The so-called interposed leases were seen as a way to thwart hostile takeovers by diverting income away from the new crofter landlords. Last year, ministers raised a test case in the Scottish Land Court to challenge the leases - and the Crofting Reform Act, passed this year, amended legislation to allow crofting community bodies to buy out leases granted by landlords.

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But, yesterday, the land court said the interposed leases were valid in a test case centred on the 25,000-acre Pairc Estate in Lewis, where crofters launched a hostile takeover in 2005, although talks have been held to seek an amicable settlement. It is unclear where the ruling leaves the bid.