Administrators at war: Rights to Stanford assets disputed in UK courts

Grant Thornton fights to unfreeze $110m of Texan's London operation

A titanic transatlantic battle over the British remnants of the banking empire once headed by the disgraced Texan financier Allen Stanford is being fought out in the UK criminal and supreme courts.

The US Department of Justice is looking to seize $110m of Antigua-based Stanford International Bank assets in London, which have been identified by administrator Grant Thornton. The DoJ believes that the proceeds are the result of Mr Stanford's alleged $7bn Ponzi scheme, for which he is currently standing trial in Texas (see box), and so should be repatriated to a US-appointed administrator under criminal forfeiture rules.

Grant Thornton, which was appointed by Antiguan authorities, believes that it should have the right to take control of the assets and then pass them back to creditors, more than 20,000 of whom are victims of alleged fraud, as it sees fit. At present, the $110m is frozen, even though those assets are among the very few that have been identified and recovered around the world.

US receiver Ralph Janvey and Grant Thornton are, in effect, competing over which country should be considered the legal centre for the liquidation and, therefore, who has rights over the assets. Grant Thornton appears to have gained the upper hand following a series of recent rulings in British courts, though the DoJ is still fighting its corner.

The assets were frozen after the Serious Fraud Office, which acts for the DoJ in the UK as part of a reciprocal agreement, successfully argued in 2009 that they should not be touched by the Grant Thornton. The US gained a similar restraint order for around $140m of assets held in Switzerland. However, last August, Mrs Justice Gloster, sitting in the Central Criminal Court in London, ruled that Grant Thornton should be granted a $20m line of credit from the assets to help fund its costs.

On 16 January, Justice Gloster set out her reasons for making that order. She said: "It appeared to me that a funding order providing for a credit line of $20m provided an appropriate and proportionate balance between the reasonable needs of the joint liquidators [Grant Thornton's Marcus Wide and Hugh Dickson] to have access to the funds, in order to maximise recoveries in the liquidation, on the one hand, and the interests of the DoJ on the other to have the restrained assets preserved."

At the end of January, Grant Thornton's legal firm, Lawrence Graham, asked the Supreme Court for permission to fight the freezing order. This was granted, but with the backlog of cases at the Supreme Court the case is unlikely to be heard until 2013.

Crucially, the court did not rule out Grant Thornton being able to have the appeal heard by Justice Gloster in the junior criminal court. It is understood that the administrator and its lawyers have now asked whether she will hear an application to set aside the restraint order, which, if successful, would give Grant Thornton control of the $110m.

A SFO spokesman said: "We continue to act on behalf of the Department of Justice, through what is known as mutual legal assistance, in attempting to repatriate money for the worldwide victims of the Stanford collapse."

Even if this is resolved, billions of dollars are still to be identified and recovered. Some argue that they were lost to funding Mr Stanford's notoriously lavish lifestyle: he is best known in the UK for backing an outlandish $20m, winner-takes-all cricket match in 2008, which England lost to a Caribbean team called the Stanford Superstars.

In court: Stanford's former college pal testifies

James Davis, Mr Stanford's former finance chief, spent Thursday and Friday in a Houston court as the chief prosecution witness against his old boss.

For Mr Stanford, this is an emotional betrayal: the two had been friends for nearly four decades, meeting while in college. Mr Davis described Mr Stanford's managerial style as "charismatic, dictatorial", testifying that the tycoon had been the "chief faker" among those who allegedly cooked the books.

Mr Davis said that he had also "lied about the truthfulness of the statements of Stanford International Bank Limited". He has pleaded guilty to charges of fraud, conspiracy and obstruction as part of a deal with prosecutors that will see him receive a reduced sentence.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Books should be for everyone, says Els, 8. Publisher Scholastic now agrees
booksAn eight-year-old saw a pirate book was ‘for boys’ and took on the publishers
Life and Style
Mary Beard received abuse after speaking positively on 'Question Time' about immigrant workers: 'When people say ridiculous, untrue and hurtful things, then I think you should call them out'
tech
Life and Style
Most mail-order brides are thought to come from Thailand, the Philippines and Romania
life
News
i100
Life and Style
tech
Voices
Margaret Thatcher, with her director of publicity Sir Gordon Reece, who helped her and the Tory Party to victory in 1979
voicesThe subject is being celebrated by the V&A museum, triggering some happy memories for former PR man DJ Taylor
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Recruitment Genius: Administrator - IFA Based

£22000 - £24000 per annum: Recruitment Genius: This is an opportunity to join ...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions