Investor Alex Fundora feels like he's been forgotten as court-appointed receivers fight over the scraps of R. Allen's Stanford's fallen $7 billion financial empire.
The Miami man lost $2.7 million on certificates of deposit -- money he thought was safe -- when government regulators in Antigua and Dallas took over Stanford's operations, accusing him of running a Ponzi scheme.
Fundora filed an amended affidavit Feb. 17 asking the Eastern Caribbean Supreme Court of Antigua and Barbuda to remove an accounting company liquidating Stanford International Bank, saying London-based Vantis is in over its head and in jeopardy of going bankrupt itself.
But Fundora doesn't stop there. He finds fault with the U.S. receiver, Dallas attorney Ralph Janvey of Krage & Janvey, who is generating $1.1 million in fees a month. Janvey plans to sue Stanford depositors who lost money, and a federal class action case in Miami alleges the U.S. receiver has ignored depositors who created trust funds.
"My biggest problem is I'm a victim," Fundora said in an interview. "Everyone who was a depositor was a victim, and we are being re-vicitimized. It seems like everyone is having a feast at our expense."
His affidavit filed in the Antigua bankruptcy case sums up the growing discontent with Vantis and Janvey among Stanford's alleged victims. Fundora urges the Antigua court to replace Vantis' Nigel Hamilton-Smith and Peter Wastell as bankruptcy liquidators with Marcus A. Wide of PriceWaterhouse Canada.
Wide has done 35 Caribbean bank liquidations, said Fundora's attorney, Ed Davis of Astigarraga Davis in Miami. Wide "is a master of the Caribbean. They (Hamilton-Smith and Wastell) are complete neophytes, and they have proven it over and over again in this liquidation."
Fundora is the face leading about 100 investors who claim a total of $70 million in losses in Antigua-based Stanford International Bank and want Vantis to be removed. The thrust of their argument is the accounting firm Ernst & Young has issued a "going-concern warning" regarding Vantis' continued financial viability.
Davis blames Vantis' financial difficulties on its decision to pay $11 million to contractors who worked on the bankruptcy rather than wait for court approval of a fee application.
"Another mistake," he said.
Elsewhere, a Quebec Superior Court judge said Vantis' application to be named foreign receiver for Canadian investors was riddled with untruths and misrepresentations. As a result, the court named Janvey the official representative for Stanford's Canadian customers, finding that Vantis destroyed computer servers with information about Stanford Canadian accounts.
Superior Court Justice Claude Auclair said he was removing Vantis as representative "because of the absence of good faith and of respect towards the Canadian public interest, represented by the court and the regulatory authorities."
But back on its home turf in London, Vantis got the upper hand on Janvey in a court ruling Thursday from the British Court of Appeal, which ruled the Antigua liquidators are the recognized foreign representatives of Stanford International Bank.
"This is a big, big blow to Janvey," Davis said. "Janvey lost hands down."
Janvey's Web site for victims of Stanford's alleged fraud said he disagrees with the decision as well as its finding that Stanford International Bank's "center of main interest" is in the Caribbean country and not the United States.
"The court's conclusion is wrong because the U.S. receivership clearly is an insolvency proceeding," Janvey said on the Web site. Stanford International Bank "is dramatically insolvent. It is being liquidated for the benefit of creditors."
What is worrisome to creditors is that a faltering Vantis may negotiate with Janvey and "give away rights that would be beneficial to the victims in order to keep its position," Davis said.
Jeffrey Schneider, a partner with Levine Kellogg Lehman Schneider & Grossman in Miami, said it's not unusual for receiverships in different jurisdictions to fight for turf.
"Turf wars accomplish nothing other than exponentially increasing the fees of the professionals," said Schneider, who has frequently served as a receiver. "Victims' recovery certainly aren't enhanced under those circumstances."
Fundora sees all this posturing by receivers as draining Stanford's assets. He said Vantis and Janvey's "burn rate" is insulting to victims of the alleged fraud.
Janvey angered Stanford victims last summer when he requested $20 million in fees. Earlier this month, the U.S. Bankruptcy Court in Dallas approved another $8.8 million in fees for Janvey, and he estimated he is spending about $1.1 million each month in search of remaining assets.
In a highly unusual move, the Securities and Exchange Commission, which recommended Janvey for the job, opposed his initial fee request.
"Having the SEC object to the receiver's fees is very uncommon," Schneider said. "Janvey should be sharing his fee applications with the SEC before his is filing them."
Janvey, who did not return phone calls for comment, has taken plenty of heat from Stanford clients. Here's just one item from a bulletin board on the Web site Frauds and Victims: "Janvey will go down in history as the worst receiver ever appointed by the SEC and in American Ponzi history. Most of the receivers get back between 40 percent and 85 percent. He could not even get 1 percent, but he charged 33 percent over his miserable findings."
The post is signed "Was a calm cool investor."
Luis Delgado, a partner with Homer Bonner in Miami, represents plaintiffs in a class action suit filed in Miami federal court on behalf of Stanford trust depositors who claim they lost more than $200 million. He said Janvey has blatantly ignored his frustrated clients.
"They don't understand why Janvey and Vantis aren't working together and why we have two parties generating fees," he said.
Delgado contends Janvey is going after lost causes by suing net losers, former Stanford customers who may have earned some interest but ended up losing money when the bank went belly-up. The SEC has asked him to drop such lawsuits.
"I don't understand this receiver going after a lot of the same people he is supposed to be protecting," Delgado said. "I think it's a waste of time and waste of the estates' assets."
An examiner appointed in the SEC case to advocate for Stanford investors said Janvey has not explained adequately why he needs to use so many professionals. Intervenor examiner John Little, a partner with Little Pedersen Fankhauser in Dallas, said Janvey's fee requests suggest "the substantial possibility that the whole of the receiver estate could end up, not in the hands of the victimized investors, but in the pockets of the receiver and the firms he has retained," according to a court filing in August.
But it's noteworthy that both Little and the SEC signed off on Janvey's latest $8.8 million fee request. Either way, the turf war is far from over. The Dallas bankruptcy judge has yet to decide who is the top receiver in Stanford. People who claim they lost money to Stanford can't even ask to remove Janvey because he serves at the behest of the SEC.
"They basically ate the roast and left the drippings," Davis said. "This case is a poster child on how you shouldn't do a multi-jurisdictional international asset recovery."
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