Thursday, August 02, 2012Last Update:
Court Says Receiver Must Unravel
Ponzi Assets
By DAVID LEE
DALLAS (CN)
- A federal judge ruled against Antiguan court-appointed liquidators of
convicted Ponzi schemer R. Allen Stanford's assets, finding that American
court-appointed receiver Ralph Janvey is in charge.
On Tuesday,
U.S. District Judge David Godbey only granted conditional, limited relief to
Nigel Hamilton-Smith and Peter Wastell, who were appointed as receiver-managers
of the Stanford International Bank by the Eastern Caribbean Supreme Court in
the High Court of Justice of Antigua and Barbuda in February of 2009.
Two months
later, the men filed for recognition in Dallas Federal Court under Chapter 15
of the U.S. Bankruptcy Code. The duo have been jockeying with Janvey, a
Dallas-based attorney, over the collection and payment of Ponzi scheme assets
since.
Godbey only
granted the joint liquidators "foreign nonmain" recognition because
he concluded the Stanford entities' "center of main interest" was the
United States, not Antigua.
"Stanford employees managed and directed the [certificate of
deposit] enterprise from the United States with no meaningful input from
Antigua," Godbey wrote. "Although SIB, the issuing bank, was
chartered and registered in Antigua, Stanford and [James] Davis controlled it -
with assistance from [Laura] Pendergest-Holt - from various places within the
United States ... Antiguan employees were excluded from decisions regarding
SIB's self-professed primary business: CD-proceed investments."
Specifically, Godbey limits Hamilton-Smith and Wastell to "the
examination of witnesses [and] the taking of evidence or the delivery of information
concerning [SIB's] assets, affairs, rights, obligations or liabilities."
He was
particularly concerned about the duo's history of repeated interference with
Janvey.
"For
example, early on in the action, without notice to the Receiver or the Canadian
court, the Former Joint Liquidators entered one of the Stanford Entities in
Canada and wiped its computer systems clean of information," Godbey wrote.
"Second, the current Joint Liquidators have attempted numerous times to
unseat the Receiver from his role as the recognized foreign representative in
Canada." Godbey continues: "Further, the Joint Liquidators have
actively objected to criminal seizure proceedings by the U.S. Department of
Justice in Canada, the United Kingdom, and Switzerland, and have taken
affirmative steps to block the repatriation of Estate assets generally in the
United Kingdom and Canada. Fourth, the Joint Liquidators have proven to be
extremely litigious and calculating in this Court, filing multiple notices of
objection to the Receiver's requests in this and other Stanford [multi-district
litigation] suits, and filing motions to pursue claims the Receiver was already
pursuing. The Joint Liquidators have admitted that they seek funds first and
foremost to fund their current operations, which include challenging the
Receiver's authority worldwide, not to distribute to investor-victims and
creditors."
Godbey said
this repeated interference with Janvey has "been the norm" and is
"particularly worrying."