Wednesday 13 November 2013

Antigua and Barbuda: High Court declines to interfere with liquidator's discretion regarding creditor distribution

The Stanford International Bank (SIB) was incorporated in Antigua and Barbuda under the International Business Corporations Act of Antigua and Barbuda, Cap. 222. The bank collapsed in 2009 and was placed in liquidation. The bank's current liquidators were appointed by the High Court of the Eastern Caribbean Supreme Court in 2011 and they decided to reduce the amount that the original liquidators had proposed distributing to the creditors. This reduction was challenged before the High Court, the court being called upon to interfere with the liquidator's discretion.

In an opinion delivered at the end of October, the court decided not to interfere, finding that the proposed distribution method was within the ambit of the liquidators' discretion: see here (pdf). In doing so, the court relied upon English authorities; it also considered the meaning of 'ponzi' scheme, referring to USA case law, and described SIB as  "... a monstrous behemoth, demonically mendacious, with some serpentine subtlety calculated towards evading scrutiny, festering in its own corruption beneath a beautiful skin – until it inevitably imploded" (para. 55).

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