Stanford Receiver Seeks Approval for 1 Percent Interim Payout

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

 

Statement Regarding DoJ Meeting Next Week

Dear Members,

The Joint Liquidators have posted responses to communications from Ms Shaw and Mr. Escalona on their website at sibliquidation.com.   These are quite lengthy and we thought it might be useful to summarise a couple of the key points, and add some comments of our own before we go to Washington DC to represent Stanford International Victims Group at the "summit" meeting between DoJ, the victims groups, the Receiver parties, and the Joint Liquidators and their Creditor Committee.

From where we sit it appears that Ms. Shaw and Mr. Escalona have joined forces to encourage the DoJ and Receiver parties to block the JL's actions to get an early release of the SIB frozen funds - preferring the "all American" solution, no matter what the cost or delay.  The DoJ intervention to freeze funds, took place at a time when the funds were not at risk as they were going to go to one of the Court appointees. In so doing they have only caused several years delay in these funds becoming available to support recovery actions and distributions to depositors without adding any value or certainty.  The JL's have been trying to get these funds released since their appointment over a year ago as they were in a position to flow the bulk of them through to depositors promptly, and use some part of them to generate further recoveries which could also have been distributed by now.  (The JL's did not press forward with their claims process as early as they might have had there been the prospect of distribution to save money in the early going.)

There is no doubt that DoJ was continually aware of Ms. Shaw and Mr. Escalona, and hearing from no other victims were able to assume these were the only victim voices. Were it not for the JL's we would not have been included in this summit, as DoJ say they were not aware of the Stanford International Victims Group, nor its site which we believe properly posts all victims views in an effort to be genuinely representative. In that context we note Ms Shaw did not post the JL's response to her open letter, and as best we can tell neither has Mr.  Escalona posted the multiple responses by the JL's to his open communications.  We are concerned that he has mostly served to "re-victimise" the victims by asking for more money on a continuing basis.

Mr. Escalona also continues to make legal pronouncements on the JL's procedures and policies.  He is not a lawyer licensed to practice any where that we can determine, and certainly not in Antigua.  We are told he has not answered the JL's on this point when they asked him directly if he was a lawyer.  He demonstrates a continuing lack of knowledge of the laws of Antigua, and binding rules implemented under those laws, and the simply has no experience with, or understanding of, the intricacies of international insolvency proceedings. Unfortunately it appears he is simply wrong on many of his pronouncements, yet to depositors who rely on him for information, his is only voice heard, which creates problems and costs for the JL's as they go about their business.  

We invite you to look at the backgrounds of the JL's team who are all specialists in fraud and international insolvency with many years experience.  The US team of lawyers, including the Receiver, the lead lawyer from Baker Botts, the Examiner and the tort lawyers on OSIC, have virtually none collectively, never mind individually, nor does the US Court running the US case, which has declined to refer the matter to the US Bankruptcy Court, where that expertise resides. Bluntly it seems to us that this is one of the biggest reasons why the JL's have not been able to come up with a cooperative protocol, as fear by the Receiver parties for their positions  prevails rather than an understanding as to how to make the tools available work for both of the Receiver and the JLs,which was the JL's aim.

We note the JLs have pledged to continue the fight to recover funds for the earliest distribution possible and ultimately in the largest amounts possible.  If any of our members have concerns or questions with respect to what the JLs are doing, it is our experience that they are very responsive to direct communication.  

COVISAL and SVC Amend Specimen Registration Forms

This is an URGENT message for any victims who followed the advice given by COVISAL and SVC to file their own SF-95 claims using the specimen registration forms they provided.

It has come to our attention that COVISAL and SVC have just released amended specimen claim forms correcting errors in their previous release.
This raises serious concerns regarding the wisdom of taking legal advice from people who have no legal background.

Please be aware that if you have tried to complete your own registration and following the guidance provided by COVISAL & SVC, You need to look closely at the amended versions to check for more mistakes.

After waiting for months for these documents (which you were all assured by Covisal and SVC were easy to complete) and now finding out that both originals require amendments - you have to ask yourself if you are willing to take the risk that the amended versions are correct.

For those that are questioning the advice you were originally given and the fact the (long awaited) specimen registration forms are your last chance of registering your interest, perhaps now is the time to ask yourself if it is worth taking the chance of having your form rejected by the SEC?

Remember this is your one and only chance to register your claim against the SEC and you only have 7 days left, for some it is already to late! We would once again advise all victims to make contact with Gaytri Kachroo and make sure the job is done correctly by downloading the contract of engagement and sending it to info@kachroolegal.com.

These mistakes made by people who are not lawyers could cost you all dearly and leave both people who supplied you with incorrect information open to being sued. You need to think carefully about the advice you have received, but more importantly you have to question if the revised information is correct.

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Este es un mensaje urgente para que ninguna de las víctimas que siguieron el consejo dado por Covisal y SVC para presentar su propia SF-95 reclamaciones en los formularios de registro que muestra siempre.

Ha llegado a nuestra atención que Covisal y SVC acaban de publicar modificado los formularios de reclamación muestra la corrección de errores en su versión anterior.
Esto plantea serias preocupaciones acerca de la conveniencia de pedir la opinión jurídica de las personas que no tienen formación jurídica.

Tenga en cuenta que si usted ha tratado de completar su propio registro y siguiendo las orientaciones dadas por Covisal y SVC, Usted tiene que mirar de cerca las versiones modificadas para comprobar si hay más errores.

Después de esperar durante meses para estos documentos (que se asegura a todos por Covisal y SVC fueron fáciles para completar) y ahora saber que tanto los originales supone la modificación - que tiene que preguntarse si están dispuestos a asumir el riesgo de que las versiones modificadas son correcta.

Para aquellos que están cuestionando el consejo que le dieron origen y el hecho de las formas (esperado) muestra el registro son su última oportunidad de registrar su interés, tal vez ahora es el momento de preguntarse si vale la pena tomar el riesgo de que su forma rechazada por la SEC?

Recuerde que esta es su primera y única oportunidad de registrar su reclamo en contra de la SEC y que sólo han 7 días a la izquierda , para algunos ya es tarde! Queremos una vez más asesorar a todas las víctimas para hacer contacto con Gaytri Kachroo y asegúrese de que el trabajo se hace correctamente, descargue el contrato de compromiso y de enviarlo a info@kachroolegal.com.

Estos errores cometidos por personas que no son abogados podría costar muy caro a todos y dejar las dos personas que le suministró la información incorrecta abierto a ser demandado. Usted necesita pensar cuidadosamente acerca de los consejos que hemos recibido, pero lo más importante que tenemos que preguntarnos si la información revisada es correcta.

Author: Stanford's Nemesis

Investors Want Aid From Stanford-Linked Congressman

A group of investors in Allen Stanford's alleged Ponzi scheme are demanding a powerful Texas congressman give them the same kind of support he showed Stanford when regulators shut down the alleged scam in February.

The Miami Herald reported Sunday that on February 17, the day the Securities and Exchange Commission charged Stanford with a massive fraud, Republican Congressman Pete Sessions wrote an e-mail to Stanford saying, "I love you and believe in you. If you want my ear/voice—e-mail."


The Herald says the Justice Department has launched a "sweeping" investigation into Stanford's ties to Sessions and other lawmakers from both parties. A Justice Department spokeswoman declined to comment to CNBC about the report, because it is "an ongoing case."

But the Stanford Victims Coalition, which claims to represent some 28,000 investors, is seizing on the report to demand Sessions come to their aid.

"While Congressman Sessions was writing that email to Allen Stanford on that fateful day in February," writes Coalition founder Angela Shaw in a letter to Sessions' office, "panic struck the lives of Stanford investors as they feared the worst—that their retirement plans, their children's' college savings, their life's savings would never be recovered."

Shaw, who lives in Sessions' Dallas Congressional District, notes that Sessions has been supportive of the Stanford investors in the past, including signing a letter from 48 members of Congress to SEC Chairwoman Mary Schapiro earlier this year seeking coverage for the investors under the Securities Investor Protection Act.



Now, armed with Sessions' e-mail to Stanford, Shaw is demanding the Congressman step up his fight for the coverage, which would allow the investors to collect as much as $500,000 in insurance proceeds from the Securities Investor Protection Corporation, which, so far, has refused to cover the Stanford investors.

"I implore Congressman Sessions to do the right thing and help Stanford victims obtain SIPC coverage," Shaw writes, adding, "We need the kind of genuine support he showed Allen Stanford in February."

Sessions, the Chairman of the Republican Congressional Campaign Committee, was among a bipartisan group of lawmakers who came to be known as the "Caribbean Caucus" as a result of their frequent trips to the region--trips funded by a Stanford-backed non-profit organization. He has received $44,375 in campaign contributions from Stanford and members of his staff, according to the Miami Herald.

Sessions' press secretary, Emily Davis, has defended the Congressman, saying in a statement to Politico this week that "Allen Stanford had everyone fooled," and insisting Sessions has worked to ensure that investors get justice.

As for the e-mail, Davis says while it "cannot be authenticated, Congressman Sessions believes that its contents represent language he would use to communicate with a person in crisis to encourage right decisions and prevent further tragedy."

The statement appears to ring hollow with the Victims Coalition. In her letter to Sessions' office, Shaw notes, "his reputation is on the line—along with our financial futures."