STANFORD LIQUIDATORS FEUD

from Bloomberg reprinted as fair use
By Lindsay Fortado and Laurel Brubaker Calkins HOUSTON, USA (Bloomberg) -- Allen Stanford’s UK assets seized in a fraud probe have sparked a legal fight between court-appointed liquidators from the US and Antigua who are both seeking the right to distribute the money to creditors. Lawyers told a London court at a three-day hearing this week that that they can’t reach an agreement on which receiver should control the 120 million pounds ($198 million) held by Antigua-based Stanford International Bank in the UK. “Cooperation has been sought” with the US receiver, said Antony Zacaroli, the lawyer for the Antiguans. “It hasn’t been achieved yet.” The liquidators are also clashing in federal court in Texas over which has the authority to recover Stanford’s international assets. Stanford, the sole shareholder of Stanford Financial Group Co., was accused Feb. 17 in a US Securities and Exchange Commission lawsuit of operating an $8 billion Ponzi scheme. Stanford, 59, has denied wrongdoing. US District Judge David Godbey in Dallas froze Stanford’s corporate and personal assets and placed them under the control of Dallas receiver Ralph Janvey. Antiguan receivers Nigel Hamilton-Smith and Peter Wastell were given authority over the bank’s assets by the island government. Both receivers have issued reports stating they have located less than $1 billion in assets, far less than needed to repay the depositors. Stanford International Bank was established and incorporated in Antigua 19 years ago and is regulated by the island’s Financial Services Regulatory Commission, so the bank’s funds should be liquidated there, Zacaroli told Justice Kim Lewison Thursday at the start of the hearing. Stanford’s UK assets are all in SIB’s name, he said. “This isn’t just a receptionist, this isn’t just a person receiving post,” Zacaroli said of the bank’s Antigua office. “There were 88 employees there.” Stanford’s global operations were based in Houston and the US receiver should be responsible for distributing the bulk of his assets to creditors, said Janvey’s lawyer, Stuart Isaacs. “If you entrust the assets to the office holder who’s in charge of the group, that person can act more efficiently and more effectively for shareholders,” Isaacs said Thursday. Stanford, two associates and three affiliated companies were accused by the SEC of defrauding investors through the sale of bogus certificates of deposit by SIB. In a separate dispute, the Antiguan receiver last week asked Godbey, the Dallas judge, to delay approving a request for $20 million in legal fees by Janvey. Paying such a high fee may improperly siphon assets that could be used to repay depositors holding Stanford’s bogus certificates, the receivers said. The Antiguan receivers have asked Godbey to defer approval of Janvey’s fees until he’s ruled on their request to place SIB under Chapter 15 of the US Bankruptcy Code, a move Janvey opposes. Hamilton-Smith and Wastell seek to deal with SIB separately in bankruptcy court, leaving Janvey to handle the remaining Stanford companies through his receivership.