Stanford Turf Battle Ends, Receivers Gain

Chidem Kurdas

Allen Stanford claimed to have more than 30,000 clients in 133 countries. When the Securities and Exchange Commission in early 2009 shut down the American operation that controlled this far-flung network, the global web quickly unraveled and local authorities took control of businesses in various parts of the world.

Assets were frozen as estate receivers backed by different governments fought for control. This added to the hardship suffered by the victims of Stanford’s scam—see Political Sticky Wicket: The Untouchable Ponzi Scheme of Allen Stanford

A long-awaited agreement was announced today between the American receiver and the liquidators of the Antiguan estate. The deal has the merit of putting an end to the international turf battles, legal maneuvers that have been going on since 2009 at the expense of the victims—that is, financed by money that belongs to them but is controlled by regulators, courts and receivers.

Stanford took in seven-to-eight billion dollars, spent and lost most of it. But he still owned a lot of property in Antigua and hundreds of millions of dollars in bank accounts mostly in Britain, Switzerland and Canada.

In exchange for unfreezing the assets, the agreement gives $36 million to the Antiguan estate liquidators. This is to pay for litigation.

Early in the receiver wars a British judge noted that the Antigua liquidators’ expenses so far – mainly to get court permission to spend money –  came to $1.6 million. That was then. At this stage they have already spent $20 million from the accounts in the UK.

The American receiver has spent a lot more than that, though at least he got back some money from beneficiaries of Stanford’s scheme and largesse.

The agreement will give the American receiver – the attorney Ralph Janvey and allied lawyers – control over more assets. This may sound like a good thing for the victims—more money to be returned to them.

But it is notable that government-appointed receivers can litigate indefinitely as long as the estate has assets to pay them. They will sue far and wide, regardless of whether the suits has a realistic chance of success. It does not matter if the litigation brings no new funds, as the lawyers pay themselves from the ready money in the estate.

To paraphrase an old Willie Nelson song: If the estate’s got the money, honey, the receivers got the billable hours.


Tags: , ,

2 Responses to “Stanford Turf Battle Ends, Receivers Gain”

  1. Stanford Assets Under Government Threat | HedgeFundSmarts Says:

    […] Top News and Analysis about Non-Traditional Investing « Stanford Turf Battle Ends, Receivers Gain […]

  2. Stanford Victims’ Good and Bad News | HedgeFundSmarts Says:

    […] agreement gives additional resources to the liquidators and receiver.  Senator Vitter asks: “Please provide me with details as to why the SEC supported this […]

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: