Allen Stanford victims to receive $55 mln under receiver plan
Stanford Receiver Seeks Approval for 1 Percent Interim Payout
By Andrew Harris & Laurel Brubaker Calkins - Jan 12, 2013 1:01 AM GMT-0400.
Investors swindled by convicted financier R. Allen Stanford may receive an interim distribution payment worth a penny on the dollar of their losses, Stanford’s U.S. receiver said in a court filing.
Ralph Janvey, the court-appointed receiver, asked a judge’s permission to pay more than 17,000 investors an initial distribution of $55 million, according to a filing yesterday in federal court in Dallas.
The sum represents about 1 percent of the $5.1 billion investors lost on bogus certificates of deposit at Antigua-based Stanford International Bank Ltd., according to Janvey’s filing.
“The receiver anticipates that future distributions will be made using amounts from the estate’s retained funds and additional amounts ultimately recovered through litigation, class action settlements and other asset recovery efforts,” Kevin Sadler, Janvey’s lead lawyer, said in the filing.
Stanford, 62, was convicted in March of stealing more than $2 billion from depositors at his Caribbean bank to finance a lavish personal lifestyle of private jets, yachts and mansions. Stanford is serving a 110-year federal prison sentence in Florida as he appeals his conviction and sentence.
Investors initially claimed more than $7 billion in losses from Stanford’s Ponzi scheme, which paid early investors above- market returns with funds taken from later investors. Janvey said after reconciling 30,289 claims submitted to his Dallas- based receivership, he found many duplicates and discovered that most investors were trying to recover “fictitious interest” listed on their statements when the U.S. Securities and Exchange Commission seized Stanford’s businesses on suspicion of fraud in February 2009.
‘Fictitious Interest’
“Such balances were inflated by fictitious interest that had not yet been paid to them,” Sadler said in the filing.
Janvey calculated investors’ true losses through what he called a “net loss approach, which is calculated on a ‘money in, money out’ basis –- i.e., money paid into the scheme minus any money returned to the investor,” Sadler said. “Under the net loss approach, any fictitious, unpaid interest that has accrued on SIB CDs is not recognized.”
Janvey didn’t disclose in yesterday’s filing how much he has recovered for the estate or how much that recovery has cost.
In a June court filing, Janvey said total cash inflow for the estate was $220.1 million as of May 31. Of that recovery, $56.5 million was paid in fees and expenses to the receiver and his team of lawyers and forensic professionals, and another $51.9 million was paid in other expenses associated with winding down Stanford’s extensive business holdings. Janvey had total unrestricted cash on hand of $94.5 million as of May 31.
‘One Penny’
“To say the recovery of one penny on the dollar is disappointing is a dramatic overstatement,” Angela Shaw, founder of the Stanford Victims Coalition, said in an e-mailed statement. “The reality that $2 have been spent to recover each dollar that will be distributed is astonishing, and we can only hope this is the first step in recovering more of our savings rather than the final chapter of an inconceivable four-year nightmare.”
Comment from Kate:(What Ms Shaw fails to address is the fact that she is one of the people stopping Janvey and GT from working together and IF they were working together GT would make sure that Janvey was not allowed to spend $2 dollars to recover $1. The OSIC have been in place for 2 1/2 years and have done nothing but cost time, money and delays fro the victims, and they continue to jeopardize any equal distribution because they each have their own agenda, and we all know that Angela Shaw's agenda is SIPC for the minority at the expense of the majority)
Former Stanford employees and executives, as well as the Stanford investors and former suppliers who are being sued by the receiver in fraudulent-transfer actions, are excluded from the initial distribution plan, Janvey said. Secured creditors will also not receive payment in the interim distribution plan, he said.
U.S. District Judge David Godbey, who is overseeing consolidated litigation tied to Stanford’s business dealings, must still approve the interim distribution plan. If Godbey agrees, Janvey said payment could begin within 90 days of that approval.
John Nester, a spokesman for the SEC, declined to comment on Janvey’s filing.
The criminal case is U.S. v. Stanford, 09-cr-342, U.S. District Court, Southern District of Texas (Houston). The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09-cv-298, U.S. District Court, Northern District of Texas (Dallas).
To contact the reporters on this story: Andrew Harris in Chicago at aharris16@bloomberg.net: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.
This is a direct result of the OSIC objecting to the agreement that was drawn up between Janvey and GT. If the OSIC had agreed to the original proposal from the Washington meeting there would have been have been approximately US$250 million being distributed, instead of US$55 Million. This would have meant the difference between 1 cent on the dollar and 4 or 5 cents on the dollar
I tried to tell the victims that they should ask for the GT/Janvey agreement to be signed off, but was unable to explain why I was in favour of it. Now you are all seeing the results of what I tried so desperately to warn you all about. Now you are seeing why Richard, Stanford Nemesis, Knowing and I were thrown off the old forum, we were trying to warn you and it was important that we were silenced.
How many times do I have to tell you that Angela Shaw has another agenda in all of this. She wants SIPC and will go to any lengths to try and recover all of her loses through SIPC and to hell with any victims that is not covered or included in the group she is fighting for. She told me very loudly and very clearly that she will oppose any agreement and sharing of the funds with GT because she thinks it will stop her from getting SIPC!! She has a blatant conflict of interest in all of this and should never be allowed to take part in what is happening when all her efforts and work are centered ONLY on SIPC for the minority of victims.
This also from today's papers regarding SIPC:
"Separately, the SEC had requested that an industry backed fund, the Securities Investor Protection Corp, start a court proceeding that could help further compensate victims.
But a U.S. judge turned down the SEC's request, saying the agency had not met its legal burden to show why SIPC should be compelled to act. SIPC, which has handled high-profile liquidations such as Bernard Madoff's Ponzi scheme, contended that Stanford's offshore bank fell outside the scope of its authority.
The SEC has appealed.
The case in U.S. District Court, Northern District of Texas is Securities and Exchange Commission vs. Stanford International Bank Ltd et al, 09-cv-0298."
We also have to again look at the motives of one or two of the lawyers that are on the OSIC committee. They have filed lawsuits and are now using them to try and manipulate what is happening to achieve a payout for themselves. And while this is happening it is you and me they are using as pawns in their game of chess, and we are the losers in all of this. PLEASE VICTIMS, OPEN YOUR EYES AND SEE WHAT THE OSIC ARE DOING TO US ALL!!
The "Motion for approval of an Interim Distribution" can be viewed here.....
http://www.scribd.com/doc/120062024/Motion-for-Approval-of-Interim-Distribution
For a full and open debate on this and other important issues visit Stanford International Victims Group Forum
The worst part of this news is that because the OSIC have refused to allow the agreement between Janvey and Grant Thornton we can expect multiple interim payments by the receiver and Grant Thornton. This duplicated effort is going to cost US the victims money.
ReplyDeleteNot to mention the battle over money in the International bank accounts will continue.
Well at least they can no longer dispute the warnings Kate made were true. Its a shame nobody listened, now everybody is going to suffer.
ReplyDelete