Below is a list of frequently asked questions regarding Grant Thornton's approach to preference payments.
1. What is a Preference payment?
2. How is this relevant in the Stanford International Bank matter?
3. Why have I received a Preference letter?
4. What shall I do if I have received a Preference letter?
5. Why has my claim increased?
6. What happens once I repay the Preference payment to the Estate?
7. What happens if I do not repay the Preference payment to the Estate?
8. What do I do if I disagree with this approach?
To find the answer to these questions and more click here:
For a full and open debate on the Stanford Receivership visit the Stanford International Victims Group – SIVG official forum http://sivg.org.ag/
Showing posts with label jls. Show all posts
Showing posts with label jls. Show all posts
Tuesday, 11 February 2014
Friday, 31 May 2013
Stanford Judge Approves Interim Distribution to Victims
By Tom Korosec & Andrew Harris - May 30, 2013 9:42 PM GMT-0400
A plan by a court-appointed receiver to distribute assets recovered from R. Allen Stanford’s Ponzi scheme to investors was approved by a federal judge in Dallas.
U.S. District Judge David C. Godbey accepted the plan by Ralph Janvey, the receiver appointed in 2009 to marshal and liquidate Stanford’s personal and business assets, to make a $55 million interim distribution to about 17,000 claimants, or about 1 cent for each of the $5.1 billion lost in the fraud scheme.
“We will follow it up in a subsequent distribution as the money comes in,” Janvey’s attorney, Kevin Sadler of Baker Botts LLP, told Godbey at a court hearing in April.
Ponzi scheme victims of Bernard L. Madoff, who was arrested in December 2008, recovered more than $5.4 billion. Clients of the MF Global Inc. brokerage were paid about $4.9 billion after its parent, MF Global Holdings Ltd., failed in October 2011. Victims of a scheme by Peregrine Financial Group Inc. founder Russell Wasendorf, who prosecutors last year said stole $215 million, received an interim distribution of $123 million.
A federal jury in Houston last year found Stanford, 63, guilty of lying to investors about the nature and oversight of certificates of deposit issued by his Antigua-based bank. The jurors decided he must forfeit $330 million in accounts seized by the U.S. government.
The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09-cv-00298, U.S. District Court, Northern District of Texas (Dallas). The criminal case is U.S. v. Stanford, 09-cr-00342, U.S. District Court, Southern District of Texas (Houston).
For a full and open debate on the Stanford Receivership visit:
http://sivg.org.ag/
The Stanford International Victims Group Forum
A plan by a court-appointed receiver to distribute assets recovered from R. Allen Stanford’s Ponzi scheme to investors was approved by a federal judge in Dallas.
U.S. District Judge David C. Godbey accepted the plan by Ralph Janvey, the receiver appointed in 2009 to marshal and liquidate Stanford’s personal and business assets, to make a $55 million interim distribution to about 17,000 claimants, or about 1 cent for each of the $5.1 billion lost in the fraud scheme.
“We will follow it up in a subsequent distribution as the money comes in,” Janvey’s attorney, Kevin Sadler of Baker Botts LLP, told Godbey at a court hearing in April.
Ponzi scheme victims of Bernard L. Madoff, who was arrested in December 2008, recovered more than $5.4 billion. Clients of the MF Global Inc. brokerage were paid about $4.9 billion after its parent, MF Global Holdings Ltd., failed in October 2011. Victims of a scheme by Peregrine Financial Group Inc. founder Russell Wasendorf, who prosecutors last year said stole $215 million, received an interim distribution of $123 million.
A federal jury in Houston last year found Stanford, 63, guilty of lying to investors about the nature and oversight of certificates of deposit issued by his Antigua-based bank. The jurors decided he must forfeit $330 million in accounts seized by the U.S. government.
The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09-cv-00298, U.S. District Court, Northern District of Texas (Dallas). The criminal case is U.S. v. Stanford, 09-cr-00342, U.S. District Court, Southern District of Texas (Houston).
For a full and open debate on the Stanford Receivership visit:
http://sivg.org.ag/
The Stanford International Victims Group Forum
Saturday, 12 January 2013
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
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
Thursday, 6 December 2012
Joint Statement of the U.S. Receiver (Ralph Janvey), the Joint Liquidators (Marcus Wide and Hugh Dickson), and the U.S. Examiner (John Little)
Joint Statement of the U.S. Receiver (Ralph Janvey), the Joint Liquidators
(Marcus Wide and Hugh Dickson), and the U.S. Examiner (John Little)
Agreement reached in principle
ANTIGUA-December 5, 2012-- After extensive negotiations, and with the input of United States DOJ and SEC representatives, the U.S. Receiver (Ralph Janvey), the Joint Liquidators (Marcus Wide and Hugh Dickson), and the U.S. Examiner (John Little) have reached an agreement, in principle, that, if finalized and approved by the relevant authorities, would result in (a) coordination between the U.S. Receiver and the Joint Liquidators concerning their respective claim processes, (b) increased sharing of information, (c) cooperation with respect to the asset recovery and some of the other litigation efforts, (d) a resolution of pending disputes concerning funds now frozen in the United Kingdom, Canada and Switzerland, and (e) a release of funds for distribution to Stanford's investor-victims.
We are working on finalizing a definitive settlement agreement, which we hope to be able to present in the near future for public comment and court approval. To facilitate their discussions, all of the participants have agreed to keep these negotiations confidential until definitive agreement is reached or the parties conclude that no agreement will be possible. The U.S. Receiver, the Joint Liquidators and the U.S. Examiner have agreed to release this statement so that Stanford victims know that the various participants are continuing to work to reach an agreement that will achieve the goals set forth above. We continue to have your interests at the forefront and we understand the very difficult circumstances you face as victims.
Monday, 3 September 2012
IRS Hit Stanford Estate for $432 million
The Internal Revenue Service filed a "notice of claim" yesterday with the US District Court advising the Court that it is IRS's view that Allen Stanford is indebted to the United States for approximately $432 million in personal tax liability. The IRS intervened in the SEC's lawsuit against Allen Stanford three years ago and asserted the existence of a claim against Allen and Susan Stanford, which at that time was for approximately $226 million in personal tax liability. The U.S. District Court permitted the intervention and retained the authority to adjudicate all aspects of the IRS claim.
SIVG has been warning victims for years about the IRS having a claim against the Stanford estate, now we see our claims are all true.
Time is running out we have only two days before the JL's Grant-Thornton neet with the DoJ in Washington. Please write to the DOJ and tell them you want the money to go to Grant Thornton now before its to late!.
I want to see some sort of interim payout before the end of this year......if you want the same it is your duty to make the DOJ aware of how you feel.
Addresses to send emails:
kondi.kleinman@usdoj.gov
reeceD@sec.gov
Friday, 31 August 2012
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.
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.
Thursday, 23 August 2012
Latest Communication from Grant Thornton
GrantThornton
An instinct for growth"
Stanford International Bank Limited
In Liquidation
171 Main Street
P.O.Box 4259 Road
Town Tortola
British Virgin Islands
VG1110
Tel: +1284 494 616
20 AUGUST 2012
Stanford International Bank Limited in Liquidation (SIB)
Dear Depositor:
Thank you for taking the time to write to us and express your opinion. We trust that you had the time to read judge Godbey's ruling before writing to us. If you have not, we are in the process of posting the Order on our website in English with a Spanish translation at "sibliquidation. com".
We know that you are being asked to send letters and e-mails to the Joint Liquidators and we welcome all constructive input. But we also know that in some cases you are being asked to do so, directly or indirectly, by persons who have a personal economic stake in opposing the joint Liquidators in their efforts to obtain the best results for creditor/victims. Therefore we are inclined to view such correspondence with some skepticism.
We respectfully disagree with judge Godbey's approach to his ruling and with the ruling itself, mainly because it potentially sets up a very poor outcome for the creditor/victims of Stanford International Bank (SIB). And to be clear, we have only the interests of creditor/victims of SIB to consider, not the creditors of the many other Stanford entities whose interests the Receiver and Judge Godbey are obligated to take into account.
If you are not a lawyer or international insolvency practitioner, we understand that you may not appreciate all of the potential implications of judge Godbey's ruling and its limited application to this worldwide case if not appealed. We urge you to keep an open mind and read the following in which we set out our approach to obtaining the best results for the creditor/victims such as you. We appreciate the issues are very technical ones relating to international insolvency laws and the difference between a Receiver and a Trustee/Liquidator under US law, but this is what we do day to day. Let us try to explain some of the issues.
We know that you are being asked to send letters and e-mails to the Joint Liquidators and we welcome all constructive input. But we also know that in some cases you are being asked to do so, directly or indirectly, by persons who have a personal economic stake in opposing the joint Liquidators in their efforts to obtain the best results for creditor/victims. Therefore we are inclined to view such correspondence with some skepticism.
We respectfully disagree with judge Godbey's approach to his ruling and with the ruling itself, mainly because it potentially sets up a very poor outcome for the creditor/victims of Stanford International Bank (SIB). And to be clear, we have only the interests of creditor/victims of SIB to consider, not the creditors of the many other Stanford entities whose interests the Receiver and Judge Godbey are obligated to take into account.
If you are not a lawyer or international insolvency practitioner, we understand that you may not appreciate all of the potential implications of judge Godbey's ruling and its limited application to this worldwide case if not appealed. We urge you to keep an open mind and read the following in which we set out our approach to obtaining the best results for the creditor/victims such as you. We appreciate the issues are very technical ones relating to international insolvency laws and the difference between a Receiver and a Trustee/Liquidator under US law, but this is what we do day to day. Let us try to explain some of the issues.
- A Trustee/Liquidator has more rights than an equity Receiver with respect to some of the parties that can be sued and the nature of damages that can be claimed. This is the principal reason why the Madoff case very quickly went into bankruptcy and is making big recoveries for his victims. In the SIB case a group of creditors, through lawyers, urged judge Godbey to authorise a bankruptcy filing, a right he had unusually reserved to himself. That request was withdrawn when Judge Godbey created the so called "Official Stanford Investors Committee" (OSIC), placed some of the same lawyers who had urged bankruptcy on the OSIC, and approved those same lawyers filing lawsuits on a contingency fee basis. It is our view that the decision not to take the bankruptcy avenue, limited the remedies available to recover assets by trying to make an international proceeding US centric, and allowed the US Receiver to spend a massive sum, over $115,000,000, on the administration of the receivership. Remember it is the US Receiver who is battling the joint Liquidators - not the other way around - as normally these Chapter 15 petitions are granted quite quickly and inexpensively. However, the US Receiver has always seen it as a threat to his continued running of his Estate (which you can judge for yourself) rather than as a cooperative tool that would have eased tensions and served to allow the two estates to work in concert and thus he forced the expenditure of hundreds of thousands of dollars to block what was and remains a reasonable request. Lamentably, Judge Godbey's ruling has the feeling of a parochial, paternalistic and protective ruling which is out of step with the vast body of law developed for these types of proceedings around the world.
- Unfortunately, the ruling of judge Godbey makes findings with which we strongly disagree and which we fear will be used by third parties who assisted the fraud, to try and avoid financial responsibility for their misconduct when sued. For example, an issue raised by Judge Godbey, and Mr. Escalona, is why the joint Liquidators have yet to sue the Government of Antigua and Barbuda for the loans owed. However, despite clear evidence on this point that none of those loans are in the name of SIBL and are actually in the name of entities controlled by the US Receiver or others (like the Bank of Antigua) we feel that the facts are simply being ignored.The fact is that SIBL has no loan claim against the Government of Antigua and Barbuda but we have offered to assist the US Receiver as part of an overall protocol to collect those loans (if we can) but that has fallen on deaf ears. Why do your "advisors" continue to hide that fact from you?
- By finding that all of Stanford's entities can be aggregated, and treated as one, judge Godbey has opened the door to SIB depositors having to share assets and recoveries properly attributable to SIB with creditors from other Stanford entities including claims that may rank in the hundreds of millions of dollars, such as the IRS. This cannot happen with recoveries that are distributed through the SIB Liquidation. Our obligation under this application is only to SIB creditor/victims. At the very least the fight between competing creditors from the different Stanford companies over who is entitled to recoveries in the US proceeding may delay distributions for months or years. We have no similar issues in our liquidation estate.
- Judge Godbey in approving the US Receiver's claims process ignored our written suggestion that the claims process we had been running at that time for many months, at a much lower projected cost, be used in both proceedings; but in his ruling he is critical that we did not agree to a combined process. Had we been recognised as we requested, the US Receiver's more expensive and duplicative process would not have been necessary and it was open to Judge Godbey to accept our process in any event. Had either happened you would not have needed to file two claims nor suffer the higher cost of the Receiver's process. This has or will result in an expenditure of at least $4 million by the US Receiver which could have been significantly reduced. So please ask hard questions of those that advocate the US approach which so far has only enriched a small group of lawyers and forensic accountants and those surrounding them.
- Judge Godbey, in his conditions to relief, attempts to exert authority for his US Receiver/DoJ in parts of the world where the Liquidation has already been found by the local Courts or responsible authority, to be the "main" proceeding in the winding up of SIB. The Joint Liquidators in meeting their obligations in those jurisdictions cannot accept this - not because we don't like it - but because:
ii it will be delay any distribution to you;
iii it will be more expensive;
iv funds properly payable to you will be shared with creditors
of other Stanford entities,
of other Stanford entities,
v having been given a mandate in those jurisdictions
it would be improper and offensive to them for us to
step back;
it would be improper and offensive to them for us to
step back;
vi the conditions set by the US Judge for the very limited
form of recognition given to the joint Liquidators
include some that are completely contrary
to our duties under Antiguan law and our obligations to
you, including disclosure of the bank's confidential
financial and personal information on depositors; and
form of recognition given to the joint Liquidators
include some that are completely contrary
to our duties under Antiguan law and our obligations to
you, including disclosure of the bank's confidential
financial and personal information on depositors; and
vii the conditions of the Order, were we to seek relief under
it, prohibits us from making payments "to any US person",
which on the plain language of the Order would appear
it, prohibits us from making payments "to any US person",
which on the plain language of the Order would appear
to prohibit distributions to US based creditor/victims.
As a result, the joint Liquidators present intention is to seek no relief from the US court until these conditions are removed or modified to be fair and balanced and in the interests of all the creditor victims, or an appeal sets the Order aside. Failing that, we will seek no relief from the US court so that those conditions can never apply.
While we respect Judge Godbey and his court, we believe that his decision, unfortunately, is an attempt to bludgeon the joint Liquidators to submit to the US Receivership, in exchange for very limited assistance from his court. Whilst this is no doubt very welcome to the US Receiver and the US SEC, given their handling of this case to date, we believe that his ruling will actually result in a much lower distribution to the SIB creditor/victims. Further to acquiesce to the DoJ with respect to the "frozen assets", recognising that DoJ cannot distribute them until all Stanford's appeals are finalized, when the Liquidation could distribute the bulk of them forthwith, (a point we have been making for the last 15 months), is not in the best interests of the creditor/victiins. This is particularly so in the light of the offer we made to DoJ some months ago which would have put a substantial payment in your hands in September that is to say a month from now as opposed to a year to fifteen months from now if DoJ has control of the "frozen assets".
While Judge Godbey describes the Joint Liquidators' actions as interference with the US Receiver we would like to tell you about one specific instance of so-called "interference". The Joint Liquidators asked Judge Godbey to allow them to file damage claims in Washington DC, against four US-based third parties who we allege facilitated the fraud. Judge Godbey refused to allow such suit even though the US Receiver and OSIC, in the instance of two of the targets, had failed to file the claim or otherwise protect the right to file in Texas (where judge Godbey had ordered all suits be filed) before the filing deadlines required by Texas law had expired. Instead the Judge found for the US Receiver, and with retrospective blessing approved a filing in DC. Having filed those suits, the US Receiver appears to have done nothing of substance to progress them. In our view the combination of judge Godbey's ruling and the lack of substantive action may end up depriving the estate, and therefore you, of tens if not hundreds of millions of dollars of recoveries. Only time will tell but at least our "interference" forced the US Receiver to file the claim before the statute of limitations expired with just days to spare.
In this and other instances of so-called "interference," our actions are driven by the prospect of trying to increasing the distribution to you as quickly, cheaply and fairly as possible, while continuing to assert rights given to us in other parts of the world where SIB operated or had assets, to make recoveries on your behalf. Only the Joint Liquidators are authorized to act for you in the United Kingdom and Switzerland, and the US Receiver has purposefully ceased all actions with regard to the frozen funds there. Further, even though the US Receiver had been recognized in Canada, he had taken no action to preserve rights which were about to expire at the time of our intervention there. This failure put at risk a claim of material value which we have filed in Canada on your behalf, with the permission of the Canadian Court. Once again, our so called "interference" saved a potentially large asset of the Estate from being extinguished by the expiration of the statute oflimitations.
We do not intend to, nor have we ever indicated that we want to, "take over" the US Receivership. Those are the US Receiver's words adopted by his supervising judge, not ours. Indeed, as noted above, we only have authority over SIB and a few other Antiguan-based companies, not the whole group of companies the Receiver is charged with. Regarding SIB, our intention has been clear to all who take the time to read our papers and who want to understand them. We proposed a detailed protocol with the US Receiver to provide assistance where useful, and leadership where necessary based on an independent "who has the best chance of winning" assessment - a sharing of records and a joint claims process, in a balanced approach that respected the roles and fiduciary obligations of both Court appointees. We were open to discussion on any potentially controversial point of that proposal. Yet in his Order Judge Godbey makes no reference to our proposed protocol for cooperation between the two proceedings.
We continue to deal with the other assets outside of the US in the belief that not only can we make the most timely distribution to you, and our efforts could, if we have the tools we need, greatly increase what you ultimately recover. A favorable ruling on recognition in the US we believe will not only reduce costs but increase recoveries to you, the depositors of SIB.
That is why we are appealing judge Godbey'sruling.
Rest assured if a deal can be accomplished with the DoJ and the US Receiver that facilitates putting money in your pockets immediately while meeting the needs of the Antiguan process to optimize total recoveries for you, then we are all for it and will champion such a deal. But if it's simply about centralizing assets and recoveries in the US Receiver's hands without regard to the size or speed of the distribution to victims and in an attempt to bully other Courts that have made findings adverse to the US Receiver, into accepting US decisions, which tramples on the concept of international community in the process, then the joint Liquidators will stand firm in response to such an attack against the rights of the creditor/victims of SIB, and no amount of e-mails or letters will undermine that resolve.
We remain convinced that allowing assets located outside of the US to pass through the US DOJ forfeiture process and then onto the US Receiver is not in the best interests of the victims/creditors You Might think to ask the US Receiver and those working with him: What is wrong with the plan proposed by the joint Liquidators regarding these assets? What is wrong with avoiding another 10-12 month delay in getting you a distribution? What is wrong with funding claims against those who assisted the fraud in order to obtain potentially hundreds of millions of additional monies for distribution? What is wrong with using a cheaper claims process than proposed by the US Receiver? What is wrong with avoiding any risk that distributions to you are diluted by payments to US creditors who are not victims of the fraud? Ask these questions to whomever is urging you to write letters and e-mails to the joint Liquidators and listen carefully to the answers. Perhaps you might consider the motivations of those urging you to send these letters and e-mails and ask yourself if those motivations are consistent with your expectations to recover as much money as possible, as soon as possible, and in the fairest manner possible.
If you would like more information on the liquidation, we have just filed our third report to our supervising Court, a copy of which will be available on our website shortly in English with a Spanish translation. As noted above our website address on the internet is "sibliquidation.com".
Marcus A. Wide
for the Joint Liquidators, Stanford International Bank Limited
http://www.sibliquidation.com/images/Communication_to_Creditors_8-20-12.pdf
http://www.sibliquidation.com/images/Communication_to_Creditors_8-20-12.pdf