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.

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.