Twelve NSW councils will get to keep the $25 million payout they won over the purchase of complex financial derivatives that crashed in value.

Legal circles had expected an appeal to the High Court after the Full Federal Court last month ruled against ABN Amro, ratings agency Standard & Poor’s (S&P) and the company that sold the financial notes to the councils, Local Government Financial Services (LGFS).

But the deadline for an appeal passed last week.

An original Federal Court ruling called the notes “grotesquely complex instruments” that were inappropriate for the councils’ conservative investment strategies.

S&P was brought into the action because it gave the notes its top AAA rating.

The Full Federal Court found ABN Amro, S&P and LGFS each liable for 100% of the councils’ losses, a decision considered to be significant for insurers because it increases the liability of corporates found responsible for loss.

The case involved a number of claims and counterclaims, with LGFS suing its insurer, AIG unit American Home Assurance, which cited disclosure issues in denying liability.

The Federal Court ruled the insurer liable and the Full Federal Court rejected its appeal against the decision.