The ruling reverses a previous decision.
HOUSTON – A federal judge has ruled that the Antiguan liquidators for Stanford International Bank may file for bankruptcy protection.
Reuters reported that Antiguan government-appointed liquidators Nigel Hamilton-Smith and Peter Wastell “have shown good cause” to seek Chapter 15 bankruptcy for Stanford International Bank, U.S. District Judge David Godbey in Dallas said in a court order filed Friday.
The bank is at the heart of an alleged $8 billion fraud that the U.S. Securities and Exchange Commission has said was orchestrated by R. Allen Stanford and Baldwyn natives Jim Davis and Laura Pendergest-Holt.
A Chapter 15 filing is for bankruptcies involving debtors, assets and claimants in multiple countries. In this case, Reuters said the liquidators want the authority to file for bankruptcy as a means of safeguarding the bank’s assets.
Godbey did not say in his filing whether the bankruptcy petition would be granted. The ruling reverses a prior decision that only the court-appointed receiver had authority to seek bankruptcy protection.
Ralph Janvey, the U.S. court-appointed receiver in charge of Stanford’s operations and assets, had opposed a bankruptcy filing for the bank, saying it would be disruptive and costly, according to Reuters.
Wastell and Hamilton-Smith on April 15 were directed to liquidate the Stanford bank by a member of the High Court of Justice for Antigua and Barbuda.
Janvey’s lawyer, Kevin Sadler, has argued Wastell and Hamilton-Smith were acting at the behest of the Antiguan government, which Sadler said owes the Stanford bank $140 million.
Information for this story came from Reuters and Bloomberg news services.