Letter to the Editor, Caribbean360
August 22, 2011
By Eric Cohen
Dear Sir or madam,
A story published in the August 18, 2011, edition of Caribbean360, "Investors question Antigua Stanford liquidators"
makes several erroneous and unfortunate statements that only mislead and confuse victims of SIB's failure.
I am a creditor of the Stanford International Bank (SIB), being a holder of Certificates of Deposit (CDs). As such
I have one focus – what is the best way to maximize the estate of SIB and what is the best way to maximize the
distribution of funds to the creditors. To this end, I have become a member of the Antiguan Liquidators' Creditors
Committee, and I can assure you it is our mission to assist the Joint Liquidators in expeditiously recovering
victims' assets in a process that is equitable and transparent.
Unfortunately, the article published on August 18 appears bent on upsetting and confusing victims. So please let
me begin by setting some of the record straight.
First, the current liquidators, Marcus Wide and Hugh Dickson, both of Grant Thornton, were appointed only on May
12, 2011, by the High Court of Antigua. They replaced Nigel Hamilton- Smith and Peter Wastell of Vantis, who were
removed by the Court. (Wide and Dickson were not nominated by the Government, or any of its agencies, but were the
deliberate choice of victims). It is common knowledge that Vantis, the previous liquidators, owes the court and the
estate an accounting of the claim for $18 million fees and expenses, and that a hearing will occur in October,
2011. These fees may be challenged by the estate, but that cannot be known until the accounting is presented to the
court.
Second, let us not lose sight of the fact that SIB was an Antigua corporation, now in bankruptcy, and that Antiguan
laws rule on Antigua bankruptcies. It is also a fact that 99.9% of the creditors of SIB are the holders of CDs in
SIB. The Hon. Mr. Justice Mario Michel of the High Court in Antigua appointed Mr. Wide and Mr. Dickson liquidators
of SIB, charged them with the collection of all assets of SIB, and the eventual distribution of the assets to the
creditors. To also be clear, note that the Eastern Caribbean Supreme Court circuit, of which the Antiguan High
Court is a part, is, like the US Courts, independent of government, and its authority to make this appointment, and
therefore the authority of the Liquidators, has already been recognized by the Courts in Switzerland and the UK,
countries where there are significant assets. While still on the issue of authority, let's note that beyond the
High Court there is the Eastern Caribbean Court of Appeal, with a final right of appeal to the British Privy
Counsel (formerly known as the House of Lords), whose authority and competence is respected around the world.
Whereas the US courts have been recognized as the prosecutors of the SEC's case against R. Allen Stanford and his
assets, this does not, and can not, include authority for the bankruptcy of SIB.
Third, the extensive expertise of Grant Thornton, Mr. Wide, and Mr. Dickson, in the matter of liquidation,
bankruptcies, and fraud, is well documented. Please refer to their bios in the website
http://www.sibliquidation.com for
more information. I will vouch that they are very open and very conscious about their role in working for the
creditors.
Fourth, Mr. Wide and Mr. Dickson, as required by the Order appointing them, delivered a report on Aug. 15, 2011, to
the Court in Antigua that presents a detailed accounting of their work and accomplishments in the first 90 days of
their mandate, and an outline of their planned recovery efforts. The report has been circulated to victims groups,
provided to both the US Receiver and the US investors committee and posted on the liquidators' website under
"reports".
In this very lucid report, which is highly recommend for immediate reading by any and all interested parties, the
liquidators mention how both they and the previous liquidators have been handicapped by the U.S. Department of
Justice, Ralph Janvey, the court-appointed receiver in the U.S., and now the Stanford Investors Committee, in
attaining the maximum asset retrieval for the victims of the SIB bankruptcy. Included are issues where funds are
frozen and not being managed, and where it appears that funds may be appropriated by the DOJ, which took "the
position that criminal asset forfeiture has priority over the rights of officeholders or their estates" in order
to uphold their freeze of assets in the UK and Switzerland. These issues have to be a major concern for all CD
creditors.
The report also documents where an associate of R. Allen Stanford is attempting to sell off assets, at deeply
discounted prices, bought with proceeds of the SIB CDs, for personal use by Mr. Stanford. The U.S. courts, without
proper jurisdictional authority, have been powerless to claim these assets for the SIB estate. The operating
expenses funds requested from, and granted by, the UK courts, will be used to recover these assets, estimated at
$70 million or more, for all creditors.
In the first 90 days, along with the court order freezing the $70 million of Stanford- controlled assets in
Antigua, the liquidators have started an action against Mr. Stanford personally, entered into an agreement to sell
a Stanford-owned buildings worth $4.5 million, and identified numerous other claims that belong to the liquidation
estate that can be pursued for the benefit of victims.
Fifth, in spite of the August 18th letter claim that "the Stanford Investors Committee has asked Grant Thornton to
agree to a cooperation protocol between the two proceedings," such a protocol was one of the first issues dealt
with co-operatively with the U.S. receiver, who the liquidators have been in discussion with. At the present time
it appears to be scuttled by the Stanford Investors Committee, which has interjected with a demand for a protocol
of their own design which we on the advising committee fear is only to maximize the committee's projected fees
that they are charging to the estate via the U.S. courts.
Sixth, Angela Shaw questions "why a liquidator would have to litigate to secure Stanford-owned properties in
Antigua. That litigation shouldn't be necessary." Unfortunately, litigation is the only means that in the common
law system, which the U.S. shares with Antigua, to take these assets away from those who currently hold them.
While frustrating it is unavoidable.
Our Antiguan Liquidators' Creditors Committee of seven is composed of six victims from different countries
representative of the location of victims, and a seventh person was asked by a group of victims in Mexico to
participate. The Committee, which has met no fewer than five times since its creation six weeks ago, is single
minded; recover what rightfully belongs to the victims of Stanford International Bank in the maximum amounts
possible, as soon as possible, and distribute the proceeds to the creditors. We have no other stake in the game,
and we receive no compensation other than our share of what the creditors receive.
The story published August 18 in Caribbean360 has offered little to help our efforts. Rather, it pits one group
against the other, creating a deadlock that only one person could enjoy – Allen Stanford. For the benefit of the
creditors, this has to end.
Eric Cohen
Nassau, Bahamas
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