Update from the Joint Liquidators of Stanford International Bank - in Liquidation (SIB)

18 April 2011

Following the previous update on 16 December 2010, the Joint Liquidators of SIB, Nigel Hamilton-Smith and Peter Wastell, can confirm that an appeal date in respect of the removal proceedings has not yet been set.

As previously advised, whilst the case continues, the Joint Liquidators remain committed to recovering assets on behalf of SIB investors. They provide further information on the current position of the liquidation as follows:

Current position with investor claims and enquiries

 The Joint Liquidators have now agreed claims of 12,083 investors totalling over US$4 billion. The adjudication of claims received and enquiries from investors are being processed on a daily basis.

The Joint Liquidators continue to deal with email enquiries, responding to investor queries in both English and Spanish. Investors are now able to view their accounts, register their claims and change their address details via the Online Claims Management System.

All SIB investors, who have not yet registered their claim on the Online Claims Management System, should do so via the website at https://stanford.frpadvisory.com/, where their claims continue to be processed.

Assets located in Antigua, United States (US), Switzerland, Canada and the United Kingdom (UK)

Antigua
The Joint Liquidators are still working with their advisers on a full marketing strategy for the land assets, comprising:

• the freehold property occupied by the Eastern Caribbean Amalgamated Bank (Formerly Bank of Antigua) at Coolidge,
• leasehold property known as the Athletic Club,
• an island known as Pelican Island,
• an island known as Guiana Island, with approximately 1,500 acres of surrounding lands on the mainland, and
• two small plots of land at Coolidge.

There are a number of other properties in Antigua that investors have enquired about that are not owned by SIB, which are believed to be owned by other Stanford group companies. However, as the Joint Liquidators are not appointed over the other companies, they have no authority to deal with these assets. One of these companies has laid claim to the Athletic Club and resolution to ownership may be required through the Antiguan Courts.

Any claim that SIB ultimately funded the purchase of the properties not owned by SIB, will need to be made through the Antiguan Courts.

Once a co-operation agreement with the US Receiver (referred to below) is ratified by both courts in the US and Antigua, the Joint Liquidators can request further information on funds flow, to provide sufficient evidence to make a claim through the Antiguan Courts.

United States

As part of the agreement reached with the US Receiver, Mr Ralph Janvey, the Joint Liquidators would withdraw their application for Chapter 15 recognition in the US, and the US Receiver would withdraw his appeals against the decision to appoint the Joint Liquidators, made in April 2009 by the High Court in Antigua.

The co-operation agreement was concluded and is subject to Court approval in both the US and Antigua.

However, this agreement has not yet been approved by the Courts in either Antigua or the US (which is necessary for it to become legally binding), due to the requirement that there first be a resolution to the removal application brought by a Stanford investor.

Subject to the approval of both the Antiguan High Court and the US District Court, the US Receiver will deal with the realisation of the assets of SIB in the US and Canada. The Joint Liquidators will deal with the realisation of the assets of SIB located in Antigua and the UK. The co-operation agreement provides a platform for both parties to share information, to assist in their efforts to realise assets in the countries covered by the agreement.

Switzerland

There are funds held in various bank accounts in Switzerland, totalling approximately US$130 million. The financial regulator in Switzerland, FINMA, has recognised the Antiguan bankruptcy of SIB in preference to the US Receiver. The consequence of this Order means that a Swiss ancillary liquidation run by FINMA has commenced. The Joint Liquidators’ believe this liquidation will look to address the Swiss creditors first and then any balance will be passed to the Antiguan liquidation. The Joint Liquidators are currently in dialogue with FINMA. The decision is open to appeal by the US Receiver and, in addition, the US Department of Justice (DoJ) is also seeking control of the funds as proceeds of crime. The co-operation agreement referred to above does not include the assets held in Switzerland.

Canada

The Joint Liquidators made an application under the Bankruptcy & Insolvency Act in Canada for recognition of its appointment and control of the funds held in the country. At the same time, the US Receiver made the same application. During September 2009, the Superior Court of Quebec concluded that the US Receiver should be recognised as the office holder to whom control of the funds in Canada should be passed.

Legal counsel for the Joint Liquidators considered that the decision provided by the Court was erroneous and, accordingly, submitted an appeal that was heard during December 2009. The Court of Appeal upheld the initial decision of the Superior Court. The funds in Canada remain frozen following proceedings issued by the Attorney General in Ontario, Canada, again in relation to the monies being regarded as proceeds of crime.

Once again, the co-operation agreement referred to above, subject to Court approval, would mean the Joint Liquidators withdraw from any further litigation over the Canadian assets.

United Kingdom

The Court of Appeal upheld the judgment in favour of the Joint Liquidators that the Centre of Main Interest (COMI) of SIB is Antigua and Barbuda and that the funds held in the UK should come under their control.

The Court of Appeal also determined that the funds should remain subject to a restraint order granted in favour of the Serious Fraud Office (SFO) on behalf of the DoJ. The DoJ has sought that the funds be restrained, as they consider that the funds are proceeds of crime. In relation to a criminal restraint, the funds will remain restrained in the U.K and subject to the jurisdiction of the UK criminal court.

The Joint Liquidators consider that the decision to continue the criminal restraint is incorrect and creates a further delay in funds being available for return to the creditors of SIB. A hearing date for the application for leave to apply to the UK Supreme Court, in order to lift the restraint order, will not be made until resolution of the removal application brought by a Stanford investor.

The co-operation agreement referred to above, subject to Court approval, would mean the US Receiver will withdraw from any further litigation over the UK assets.

Dividend Prospects for Creditors

Until the recognition proceedings have been concluded and the land assets in Antigua are sold the Joint Liquidators are unable, at this stage, to estimate the level or timing of a distribution to creditors. However the assets traced to date are valued under US$1 billion against depositor liabilities of US$7.2 billion and although our investigations are ongoing we anticipate that there will be a significant shortfall to creditors.