Stanford liquidators apply to use assets

By Jane Croft ft.com

The liquidators of Allen Stanford’s business empire have made an application for $20m to be released from an estimated $100m of assets frozen in the UK so they can help recover other assets for victims of the alleged Ponzi scheme.

Grant Thornton, the liquidators of Antigua-based Stanford International Bank, made the application to London’s Central Criminal Court. The court heard that the liquidators would make use of the funds for lawsuits and to help manage and market property assets in the West Indies.

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The application was opposed by lawyers for the UK Serious Fraud Office on behalf of the US Department of Justice which says the money should ultimately be repatriated to the US. The assets, mostly invested in hedge funds, were frozen after an earlier Court of Appeal ruling.

Mr Stanford was accused in 2009 of orchestrating a multibillion-dollar fraud, which he denies. His trial was postponed in January to allow him to be treated for his addiction to anti-anxiety drugs. His knighthood was revoked after criminal charges were filed.

At the height of his success, he had a significant presence in Antigua. He was the island’s largest private employer, and the institution at the heart of the alleged Ponzi scheme – Stanford International Bank – was domiciled in the capital, St John’s.

Andrew Bodnar, acting for the liquidators, told the court on Wednesday they wanted permission to draw down $5m initially and then potentially further sums up to a maximum of $20m.

Mr Bodnar told the court that “it would be very different if I was asking for the entirety of the London assets”, and added he was asking “that the money is made available to ensure the liquidators do not run out of funding in pursuit of these assets”.

He told the court that the liquidators were newly appointed and had put forward a new action plan which had been approved by the creditors’ committee.

The court heard the liquidators, who have asked for a speedy decision on the issue, were also looking at the alternative of finance from a hedge fund to cover the legal claim and were facing an imminent decision on whether to sign up to this alternative.

Andrew Mitchell QC, acting for the SFO on behalf of the DoJ, told the court the DoJ had made it clear that it wanted the $100m of assets ultimately to be repatriated to the US.

“For every cent that’s released it’s one cent less for the victims – that’s the problem,” he told the court.