Antigua St. John’s – R. Allen Stanford might have been sentenced to 110 years in prison for running a Ponzi scheme through his Antigua based Stanford International Bank, but the legal battles surrounding his assets continue to rage on with some closer to home than most would like.
Caribarena spoke with Liquidator Marcus Wide on Monday and according to him, there are at least two properties belonging to Stanford that were either leased or sold by the Stanford Development Company without prior consent from his office, and these matters remain in disputation.
Wide revealed that one of those properties include the freshly re-commissioned Antigua Sun Building for which the liquidators have sought a court injunction to halt its lease until an independent valuation is done to determine whether the cost agreed upon between the SDC and the building’s new occupants are in keeping with current and fair market value.
He said the ethical thing to do in instances like these is to wait until the legal proceedings have concluded before occupying the building since the likelihood exists that the occupants could be asked to vacate the premises should a challenge be successful in the event that the new valuation warrants one.
The liquidators have already filed an objection to the court challenging the building’s tenancy while the legal aspects of the agreement are still being ironed out.
“I don’t believe they can (legally occupy the premises) while court proceedings are ongoing,” Wide said.
“What SDC allows them to do is one thing. Our freeze order is merely that we have a right to first get a valuation, then to either consent to the transaction or decide whether it is fair or not. That is our right. If SDC allow something to happen while there is still a matter before the court, I feel the court will have to deal with the issue of possession,” Wide said.
That valuation is said to be either completed or nearing completion and the findings of this report could mean another court battle between the liquidators and the SDC.
“If our valuation is that the SDC failed to get fair market value then we would go (back) to the court and say this is an improper transaction – an incompetent transaction – and we wish to decline our approval,” Wide explained.
Should this occur, then the SDC would then have the right to challenge the objection and legal battle would continue back and forth until a settlement is reached in the courts. But during this time the occupancy of the building would be considered depraved, according to Wide.
“The court would have to unravel whether their (SDC and the new tenants) view of the world is right. We have no management authority within SDC so if SDC chooses to put a buyer or tenant in possession, that’s a choice that they can make. But the consequence of them doing that, if it is challenged successfully and the court revokes the transaction, they (the court) would also insist that the tenant moves out. The court will do what it has to do, and if the court revokes the transaction then it (the lease agreement) becomes invalid and the tenant would have no continuing right,” Wide said.
When the liquidator’s valuation is received and properly analyzed, a formal response of either approval or rejection will be made and the relevant proceedings will follow.
“It would not take us long (to respond) if we have the appraisal, which I believe we should by this point
The revocation of Ms. Stoelker’s authority is part of a cooperative process which we are optimistic will maximize the value of the assets without further expensive litigation. Some time ago we commenced and have been pursuing a claim against Stanford Development Corporation to recover its assets for the benefit of its creditors as well as the creditors and depositors of SIB whose money funded SDC’s assets and operations.
Joint Liquidators Marcus Wide and Hugh Dickson
Grant Thornton are aware of the situation and are working with the Antigua Attorney General on this matter. They have assured me that there is nothing for the Stanford Victims to be alarmed about and they will be issuing a statement when the time is appropriate.
Grant Thornton are executing a cooperative strategy which has borne fruit saving potentially millions in litigation costs and while giving up nothing to Stanford and his allies.
It’s so nice to see that at least one of the Receivers (Liquidators) are doing their job and doing it well. Thank you Grant Thornton for all your hard work on behalf of the victims, you have brought new hope to many of us.
R. Allen Stanford has revoked the power of attorney given to his fiancé Andrea Stoelker to run one of his last standing companies – Stanford Development Company in Antigua and Barbuda.
Attorney General Justin Simon has confirmed the revocation and notes that his office has speedily filed at the Deeds Registry.
Simon said the move now takes Stoelker out the control seat of the company and efforts are underway to obtain the resignation of Barbara Streete as Director of Stanford Development Company.
“The Power of Attorney that Mr. Stanford gave the Andrea Stoelker has been revoked and the revocation has been filed at the Deeds Registry yesterday (Monday),” Simon said. “I am also expecting the resignation letter of Barbara Streete to follow.
” Should the resignation be as forthcoming as the AG expects, Stanford Development Corporation will be left without a managing body, and the government would then explore the possibilities of putting the company into liquidation.
“The issues of severance would be addressed” when liquidation takes place, Simon said, as will the issue of “tracing all monies that have been received by Andrea Stoelker in respect of all properties of the company which either have been sold or leased.”
The Attorney General said that at the next sitting of parliament he would look to bring Stoelker’s management practices of the company under scrutiny.
When Caribarena contacted Andrea Stoelker for a comment on the matter she said simply, “I have no comment.” She opted not to confirm or deny.
Attempts to reach attorney for the Stanford Development Company Hugh Marshall for a comment on the matter were unsuccessful.
In the meantime, a spokesman for Stanford victims has said that the government of Antigua and Barbuda needs to step back and keep themselves out of the picture on this one as their intervention at this point could affect the little ground gained by the liquidators and others over the past years.
“If it is seen by the Americans that the government is in any way putting their fingers in the pie they will jump on it. All the good that is being done by the liquidators will be lost,” the spokesperson said.
The spokesperson added that as soon as Stoelker and others find out that the Antigua Government is making any attempt to assist those affected it could easily be spun into a matter of interference.
“It will be a very bad thing. Whatever they are doing it needs to be done quietly,” the spokesperson advised.
KACHROO LEGAL SERVICES, P.C.
Stanford Update: July 2012
Dear Stanford Clients: We here at KLS continue our efforts every day to maximize your recovery and hold responsible parties liable for the Stanford Ponzi scheme. We remain confident and focused on the efforts we are taking to obtain a real recovery for Stanford victims. This letter will update you on the status of the various actions we are taking.
The SEC Lawsuit
In our lawsuit against the SEC, we are waiting on a ruling from the judge on the SEC’s motion to dismiss the case. This is the same status as our last update, and we again will let you know as soon as we have a ruling on the motion. In the meantime, the parties have exchanged initial disclosures identifying various individuals likely to have relevant information about the case. We are also preparing discovery requests to serve on the SEC, including document requests and interrogatories, seeking all available information regarding their investigations of the Stanford entities and their failure to take enforcement action to end the Ponzi scheme. We expect the SEC will oppose responding to any discovery prior to the Court’s ruling on the motion to dismiss, and we may have to file a motion requesting that the Court compel their discovery responses. We will continue to keep you updated on the status of this litigation. Please note that we continue to file claims with the SEC to include as many of you who wish to be included in the class supporting and represented by this lawsuit. Please do not hesitate to contact us individually if you have not yet filed an administrative claim with the SEC through KLS and want to be included.
The Claims Process
Currently, both the Antiguan Liquidator and the Dallas Receiver have initiated a claims process. There is no coordination between the two processes, and we must file claims in both jurisdictions. For our Stanford Further Actions clients, we have been diligently preparing and filing your claims. You will receive a full copy of your finalized claim when it is filed. We have communicated with a number of you on these claims and will continue to reach out to you in order to finalize your claims. If you have any questions about the claims process, please feel free to contact us.
IF YOU HAVE NOT SIGNED UP FOR OUR STANFORD FURTHER ACTIONS PROGRAM AND PAID THE REQUIRED FEES, PLEASE BE ADVISED THAT WE WILL NOT BE FILING ANY CLAIMS ON YOUR BEHALF AND IT IS YOUR RESPONSIBILITY TO FILE YOUR CLAIMS.
The Dallas Receivership
The Receiver in Dallas continues to cost the Stanford victims millions of dollars in fees and expenses as his team of attorneys and consultants operate the receivership estate. There are very few assets left for the Receiver to liquidate, and he appears to be focusing solely on his various clawback and fraudulent transfer cases. The Receiver should be able to reach settlements in these actions. However, based on his actions to date, we have very little confidence in him and the team of attorneys he has working for him. We believe the Receiver and his attorneys and consultants value recovering their own fees above any recovery for the victims. We have complained about this to the Court and the Receiver on multiple occasions. We are currently conducting a comprehensive review of all actions taken by the Receiver to determine whether the Receiver should be disgorged of the profits he and his staff earned over the past several years while bringing very little net benefit to the estate.
Other Potential Lawsuits
We believe there may be potential lawsuits to bring against various banks and financial institutions through which Stanford may have laundered funds. These banks may be liable if they assisted the Stanford Ponzi scheme, whether knowingly or not. In the next few weeks, we will schedule a conference call to discuss these potential actions with you. In particular, we are considering pursuing a case against the Toronto-Dominion Bank based on investor requests. We would like to schedule a call with all of those interested in pursuing such a lawsuit later next week and will send around the call in information and date to those interested in supporting such action on our part.
Negotiations with Funds to Sell Claims
We have spent several months negotiating with certain hedge funds regarding the potential sale of your claims to a fund for a discounted price. However, prices offered by these funds are a fraction of the price (in the single digits when we believe that a plausible price is 1/3 of the claim amounts or close to that amount) we believe the claims are worth, and we do not believe it is in the best interests of our clients to sell their claims at this price. We believe these funds are playing hardball. We would be happy to sell your claims at the price currently offered, but we do not recommend selling your claims at this price. The negotiations are at a standstill at this point.
As you may have recently heard, in the lawsuit brought by the SEC against SIPC to compel SIPC coverage, the Court ruled that SIPC cannot be compelled to act. We assume the SEC will appeal this ruling, but for the time being, the prospect of SIPC coverage is dim. It is unfortunate that the Stanford Victims Coalition expended so much time and money on pursuing this.
Stanford Criminal Conviction
The recent criminal conviction of Allen Stanford should help the government’s claim to recover the $300 million in assets frozen overseas. Currently, the United States and Antiguan governments are fighting for recovery of these funds. We are hopeful that, whichever government prevails, these funds available for distribution. If you have any questions or comments, please contact us.
The KLS Stanford Team.
By Sarah N. Lynch – Reuters
(Reuters) – In a blow to the victims of Allen Stanford’s $7 billion Ponzi scheme, a federal district judge ruled on Tuesday that U.S. securities regulators cannot force an industry-backed fund to start court proceedings so that victims can file claims.
The Securities and Exchange Commission had sought to force the Securities Investor Protection Corp to start liquidation proceedings for the victims.
SIPC argued that the 42-year-old Securities Investor Protection law does not apply in the Stanford case.
In his ruling, Judge Robert Wilkins for the U.S. District Court for the District of Columbia dismissed the SEC’s request, saying the agency “failed to meet its burden” of showing why SIPC should be compelled to act.
Representatives for the SEC, SIPC and the Stanford Victims Coalition were not immediately available for comment.
Allen Stanford was sentenced in June to 110 years in prison for bilking investors with fraudulent certificates of deposit issued by Stanford International Bank, his offshore bank in Antigua.
Since 2009 when Stanford was first arrested and charged, victims of the fraud have been fighting for SIPC to start a liquidation proceeding in the hope of getting back at least some of the funds they lost.
In a brokerage liquidation, a trustee winds down the business, returns securities and other assets to customers and creditors, and often tries to recover additional assets. The goal is to maximize what customers and creditors recover, and distribute assets fairly.
SIPC, whose directors are confirmed by the U.S. Senate, covers claims for investors of failed brokerages. It has handled many high-profile liquidations in recent years, including proceedings for Bernard Madoff’s Ponzi scheme and the collapse of Lehman Brothers and MF Global.
In the case of Stanford, however, SIPC has argued that the law does not cover Stanford’s victims, and that its power is limited to protecting customers against the loss of missing cash or securities in the custody of failing or insolvent member brokerages.
Stanford’s offshore bank falls outside its scope, SIPC said.
The SEC sought to convince the judge that as SIPC’s regulator, the agency had the authority to ask a court to take action if SIPC refuses to “commit its funds or otherwise to act for the protection of customers.”
“The court is truly sympathetic to the plight” of the victims, Wilkins wrote. “But this court has a duty to apply the SIPA statute as written by Congress.”