Grant Thornton Press Release
Newly formed creditors’ committee is working closely with liquidators, but fears recovery efforts could stall if money isn’t released soon
ANTIGUA-July 13, 2011– Liquidators of Stanford International Bank announced today that its newly formed Advisory Creditors’ Committee is backing a proposal to urge the U.S. Department of Justice and the United Kingdom’s Serious Fraud Office to unfreeze critical funding to the estate immediately.
The Creditors’ Committee, which is currently made up of victims from six countries, says recovery efforts for over 21,000 creditors with $7.2 billion in claims will stall to the detriment of the estate unless money is released from the bank’s own accounts that have been frozen at the instigation of the DoJ for more than two years.
“The biggest single issue that we have facing us today is funding,” said Marcus Wide, who was appointed in May as liquidator of Stanford International Bank along with Hugh Dickson. “We have been in negotiations with the Department of Justice and Serious Fraud Office asking them to act quickly and release the money. At present we are optimistic as both DoJ and SFO have shown that they understand the nature of the difficulties facing our estate, and the potential impact on victims.Unfortunately the frozen assets have lost value while frozen and we fear they could continue to decline in value the longer they remain frozen. And more importantly the estate is presently without the money it needs to gather in and protect other assets to which the victims are entitled, and to fund the legal actions that can generate further recoveries for victims.”
“The Justice Department has frozen, at a cost to creditors, these funds which would otherwise have been handed over to the estate,” added Mr. Dickson. “It is the creditors’ money and it is unfortunate that it is not available to protect the creditors’ interests and generate additional recoveries in a situation which is otherwise rather bleak.” Approximately 99.7% of all 21,000 creditors of the Bank are holders of CDs that were victimized in R. Allen Stanford’s apparent fraud, according to the Liquidators.
The six-member Creditors’ Committee held its second meeting on July 7, 2011, and unanimously approved arrangements for alternate financing from commercial funders proposed by the Joint Liquidators urging the Antiguan Court to approve of that plan as well, so that the estate can do its job, although at greater cost to creditors, in the event that a portion of the frozen funds are not released. The High Court in Antigua has since approved the funding package in principle.
“This has been a trying time for all creditors and we have no time to lose in the recovery of our funds,” said Eric Cohen, a member of the Creditors’ Committee. “We all feel the sting of Stanford International Bank’s collapse, but we have faith in the approach Mr. Wide and Mr. Dickson are taking, and are pledging them our full support.”
Alexander Fundora, another member of the Creditors’ Committee and founder of a Miami, Fla.-based home health care company that lost $2.5 million in the Stanford scheme, said it is “hard to understand why the DoJ wants to retain control of our money and for it to expect the victims to absorb the expense of the commercial funding arrangements, when the bank’s own funds should be available at no cost. We urge the DoJ to release the funds immediately.”
Stanford International Bank failed in 2009 after top executives R. Allen Stanford, James M. Davis, and Laura Pendergest-Holt executed a massive Ponzi scheme misappropriating billions of dollars of investor funds, according to U.S. prosecutors.
Mr. Dickson and Mr. Wide, who are employed by Grant Thornton, a global audit, tax and advisory firm, were appointed liquidators on May 12, 2011, replacing Nigel Hamilton-Smith and Peter Wastell by order of the High Court of Antigua.
By creating a Creditors’ Committee, the new liquidators are working to have an ongoing dialogue with creditors and to create a creditor-driven estate, something that didn’t exist under the prior administration.
“We will consult with creditors in the early stages as often as we can,” Dickson said. “At the end of the day it is their money. It is important that we have access to the insights, opinions and support of the people who we serve.”
Members of the Creditors’ Committee include Mr. Fundora, United States; Mr. Cohen, Canada; Ricardo Del Valle, Panama; Luis Lopez, Venezuela; Attorney Patrick Kelly of Minneapolis (for a group of Mexican creditors who lost $66 million), and a Swiss member. A seventh creditor, Mr Richard Watson of Antigua has recently been invited from a number of applicants to join the Committee. The Committee will meet regularly and will weigh in on major decisions.
“We have gathered a group of knowledgeable individuals who are geographically diverse and represent both large and small creditors,” Mr. Wide said. “We are convinced that working with the creditors will expedite the process of recovering assets.”