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Regional court to consider liquidation of Stanford Caribbean holdings

Published:Wednesday | January 12, 2011 | 1:00 AM
People seeking to withdraw funds line up outside the Bank of Antigua in Collage February 18, 2009. Bank of Antigua, with three branches in the twin-island state of Antigua and Barbuda, is part of Texas billionaire Allen Stanford's sprawling global business interests.

The legal battle over the liquidation of the business empire of disgraced Texan financier, R. Allen Stanford, is heading to the Eastern Caribbean Court of Appeal this month.

Liquidators at Grant Thornton, Price-waterhouseCoopers and Zolfo Cooper have been lined up to replace United Kingdom-based insolvency firm FRP Advisory to unravel the remaining assets of Stanford International Bank, which is at the centre of an alleged US$7-billion Ponzi scheme.

The bank is based in Antigua.

Nigel Hamilton-Smith and Peter Wastell of Vantis were appointed joint liquidators by the Antiguan courts, but were stripped of the role last June, after Alexander Fundora, a Stanford investor, and alleged victim who lost US$2.7 million, challenged the appointments.

His team successfully argued that the liquidators' destruction of valuable computer data in Canada warranted their removal, although most creditors continued to support the appointments.

Later that month, Vantis went into administration. Since then, FRP has tried to get permission to appeal, with the case moving back-and-forth between the Antigua High Court and the more senior Eastern Caribbean Court of Appeal.

Last month, FRP was granted that right of appeal, but Fundora's legal counsels are preparing to counter-challenge that ruling later this month.

If FRP loses, Fundora's team has lined up Marcus Wide of PwC in Canada, Hugh Dixon of Grant Thornton in the Cayman Islands and William Tacon of Zolfo Cooper in the British Virgin Islands as potential replacements.

Fundora, based in Miami, has previously endorsed Wide's appointment, but was told by the courts that three options would need to be submitted so a fair choice could be made.

Further complicating matters is a jurisdictional battle over the unwinding of assets with the receiver in the United States, Ralph Janvey.

FRP has outlined its position on the jurisdictions in which different parties can recover assets, but the other three seem to want to retain seniority over creditor claims.

- CMC