Battle Heats Up Between Stanford Receiver and Antiguan Liquidators

Julie Triedman ContactAll Articles
The American LawyerDecember 12, 2011

Ralph Janvey, the court-appointed receiver leading U.S. efforts to recover worldwide assets of alleged Ponzi schemer R. Allen Stanford's empire, is suddenly facing a new challenge: a revived Stanford bank liquidation proceeding in Antigua.

On Dec. 5 the joint liquidators for Stanford International Bank, the Stanford-owned bank in Antigua that issued bogus CDs to investors, filed a renewed motion for the Antiguan proceedings to be recognized as the authoritative Stanford insolvency. Dallas federal district court judge David Godbey, who is overseeing the U.S. receivership, will hear arguments on Dec. 21.

The motion could be a game changer. (The brief is here.) Filed by Edward Davis at Miami's Astigarraga Davis, Christopher Redmond at Husch Blackwell, and Joseph Wielebinski at Dallas's Munsch Hardt Kopf & Harr on behalf of the Antiguan joint liquidators at Grant Thornton, it asks the judge to recognize SIB's Antiguan liquidation as the "foreign main proceeding" under Chapter 15, a 2005 bankruptcy statute that governs the handling of cross-border insolvencies. If granted full recognition, the Antiguan liquidators would assume the rights of a U.S. bankruptcy trustee in U.S. courts.

Such a ruling could throw a big wrench in U.S. efforts to repatriate investor funds. Under international insolvency guidelines, the U.S. receivership is not recognized as an insolvency proceeding. Since their appointment in May, the Antiguan liquidators have already managed to block ongoing efforts by the Department of Justice to repatriate of tens of millions of dollars of frozen Stanford assets to the U.S. from the U.K. and Canada, according to Baker Botts' Kevin Sadler, lead legal advisor to Janvey.