Stanford liquidators trying to unfreeze millions
ST. JOHN’S, Antigua, Thursday June 16, 2011 – The recently appointed liquidators of Stanford International Bank (SIB) say they’re hoping to reach a compromise with various governments, including the US Department of Justice, to unfreeze hundreds of millions of dollars in assets in an effort to recover money lost by the bank’s over 27,000 creditors.
Marcus Wide and Hugh Dickson, who were last month appointed by the court in Antigua to oversee the SIB liquidation, said the estate has virtually no funds, but is saddled with obligations that exceed money on hand.
Convincing government officials around the world to unfreeze the funds is a top priority, they said.
“We hope to meet with the Department of Justice to understand the reasoning behind their approach and see if a compromise can be reached which will allow the estate to go forward with its own funds, and therefore maximize returns to creditors,” Dickson said. “To have access to the bank’s own funds presently frozen by the criminal forfeiture proceedings would generate a considerable value to the estate in terms of allowing additional recovery and asset realizations to maximize recoveries.”
Wide and Dickson also are weighing the sale of extensive real estate holdings in Antigua and are in the process of forming an advisory creditors committee.
SIB collapsed in 2009 after owner Allen Stanford and two other top executives – James Davis and Laura Pendergest-Holt – were charged with executing a US$8 billion Ponzi scheme.
Dickson and Wide were appointed liquidators on May 12, replacing the initial receivers/liquidators Nigel Hamilton-Smith and Peter Wastell of British accountancy firm Vantis, by order of the High Court of Antigua.
Since then, the new team has focused on reviewing the affairs of the estate, meeting with key counterparties and members of the former liquidators’ staff, and obtaining an overview of the estate’s legal proceedings.
In recent weeks they have met or spoken with officials from the Serious Fraud Office in the United Kingdom, the Prosecutor and Bankruptcy Trustee in Switzerland, and officers of the Attorney General of the Province of Ontario, Canada.
“Our objective has been to determine in the quickest time possible how the financial interests of the account holders, CD holders, and general creditors of the bank are best served,” Wide said. “We have also been in contact with the U.S. Department of Justice, the U.S. Receiver, and the Creditors’ Committee for the U.S. Receivership, with a view towards meeting with them once we have a better understanding of the issues between them and the SIB liquidation in Antigua.”
Dickson said a portion of the money raised from SIB account holders and depositors was invested in real estate in and around Antigua.
“These holdings are extensive and it is likely their value can be greatly enhanced if they are brought to market in an orderly manner over a period of time,” Dickson said. “It is also our preliminary view, formed with the assistance of local real estate advisors to the former liquidators, that the value of the estate’s lands can be greatly enhanced with a methodical approach to their sale, and potentially some modest investment.”
While efforts to unfreeze and recover assets are underway, the liquidators have formed an ad hoc creditors committee to provide them with input and advice on all the major decisions that face the ongoing administration of the estate, including funding and efforts to maximize recoveries.
The liquidators are reviewing the geographic location of creditors, their size and exposure to loss.
“It is our intention in the next two weeks or so to invite persons who in our view represent both large and small creditors in each major jurisdiction to participate on the creditors’ committee,” Dickson said. “This will be a creditor driven liquidation with its first and foremost goal to maximize recoveries with a view toward generating the largest distribution to the creditors as possible.”
Wide and Dickson warned that a successful liquidation depends upon funding the estate. A lack of funds will limit their ability to pursue recoveries of hidden assets and claims, they said.
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