Liquidations & Insolvencies

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First Cayman Bank loot used to pay off fraud judgment, claim liquidators

December 31, 2001
Part of the estimated $5.5 million allegedly looted from the First Cayman Bank/Gulf Union Bank group in 1997 went to satisfy a $1.75 million fraud judgment in the United States, according to the liquidators.The fraud had been committed by Sheikh Abdus Shimmy Qureshi and his now defunct Florida firm Escue Management Inc., it was alleged.

Evergreen Trustee wants offshore trust company to turn over documents

December 31, 2001
OffshoreAlert reported last month that R.W. Cuthill, Jr., the Trustee of Evergreen Security Ltd., had filed an Adversary Proceeding against Costa Rica-based Intrados S.A. at the United States Bankruptcy Court for the Middle District of Florida, where Evergreen has been in bankruptcy since January 23, 2001.

Americas International Bank is insolvent, used to launder fraud proceeds, says liquidator

November 30, 2001
Bahamas-based Americas International Bank Corporation Ltd. is insolvent and was used primarily as "a vehicle to launder funds" received from investment fraud, according to its liquidator.Accountant Clifford Culmer painted a bleak picture of the bank's activities in an affidavit filed with the Bahamas Supreme Court on November 19, 2001.

Aneco Re wins ruling over Johnson & Higgins

October 31, 2001
Bermuda-based Aneco Reinsurance Underwriting Ltd., which went into liquidation in 1991/92, has won a House of Lords ruling that might render it solvent.In a decision dated October 18, 2001, the House of Lords dismissed by four to one an appeal by broker Johnson and Higgins against a lower court's decision to award $35 million to Aneco Re.

Americas International Bank goes into liquidation

October 31, 2001
Americas International Bank Corporation Ltd. has become the latest Bahamas-based private bank to stop operating.AIBC's shareholders passed a special resolution on October 11, 2001 that the bank, which was licensed on September 23, 1994, should go into voluntary liquidation.

Americas International Bank closes for business

October 15, 2001
Americas International Bank Corporation Ltd. has become the latest Bahamas-based private bank to stop operating.AIBC passed a special resolution on October 13, 2001 that the bank should go into voluntary liquidation.

Liquidated banks sue Cayman Gov’t over US$2.5 million ‘mistake’

September 30, 2001
Two Cayman banks that were closed down by regulators due to money laundering concerns have filed lawsuits against the government seeking the return of a mysterious US$2.5 million payment in 1997. The litigation relates to the unusual circumstances in which Euro Bank Corporation, then a Class 'B' bank, obtained a rarely-awarded Class 'A' banking license on October 8, 1997.

Stockholm Re creditors to receive 30 cents on the dollar

August 31, 2001
Creditors of Stockholm Re (Bermuda) Ltd., which went into liquidation in January, 1995, are likely to receive just 30 cents on the dollar when all is said and done. A spokesman for liquidator Deloitte & Touche in London said that a dividend of 20 cents on the dollar was paid to creditors at the end of May, 2001, with a second dividend due to follow later this year.

Former owner of AFC Re caught up in fraud investigation

August 31, 2001
The former owner of Bermuda-registered AFC Re has been caught up in an investigation into an alleged $200 million fraud involving an unlicensed offshore mutual fund.Atlantic Portfolio Analytics and Management, of Orlando, was an investment adviser to Evergreen Security Ltd., which filed for bankruptcy in Florida on January 23, 2001.

Asset freeze order against Surety Bank and Trust over failed mutual fund

August 31, 2001
A Florida court has issued an injunction forbidding the liquidator of Bahamas-based Surety Bank and Trust from distributing assets to seven people, including six of the bank's shareholders.The injunction is part of an investigation into an alleged $200 million fraud committed in the name of Evergreen Security Ltd., which effectively operated as an unlicensed offshore mutual fund.

FIBG founder viewed porn while fleecing investors

August 5, 2001
First International Bank of Grenada founder Van Brink appears to have spent much of his time viewing pornography over the Internet while clients were being fleeced, according to investigators. An analysis of a hard-drive taken from a computer used by Brink in Grenada showed that "about 80 per cent" of the settings on his Internet browser were pointed at porn sites, OffshoreAlert was told.

Suisse Security Bank & Trust loses court decision over license

July 31, 2001
Suisse Security Bank and Trust has failed to have the suspension and revocation of its license overturned on the grounds that the Central Bank of the Bahamas acted unconstitutionally.At issue was whether Section 14 (1)(f) of the Bank and Trust Companies Regulations Act 2000 contravened Article 27 of the Bahamas Constitution.

Antigua Gov’t tries to seize Eurofed Bank assets

July 31, 2001
In secret court hearings held in Antigua, the island's government has been trying to seize all or most of the $76 million of assets recovered so far in the liquidation of Eurofed Bank Ltd., we can reveal.The government is claiming the assets under its anti-money laundering laws on the grounds that they are the proceeds of criminal activity by former Ukraine Prime Minister Pavlo Lazarenko, 48.

Bank of Bermuda settles Cash 4 Titles lawsuit after losing jurisdiction ruling

July 31, 2001
The loss of a key ruling on the issue of jurisdiction seems to have been the catalyst behind the Bank of Bermuda's decision to settle two civil lawsuits for an amount not to exceed $67.5 million. An application for preliminary approval of a settlement agreement with victims of the Ponzi scheme known as Cash 4 Titles was filed with the U. S. District Court for the Southern District of Florida on July 3. 

Bank of Bermuda settles Cash 4 Titles litigation

July 9, 2001
The Bank of Bermuda has settled two lawsuits filed on behalf of victims of the Cash 4 Titles Ponzi scheme, whose losses have been estimated at up to $300 million.The settlement requires the bank to pay up to 50 per cent of "actual losses" suffered by participants in the Cash 4 Titles scheme, according to a press release issued on July 9, 2001 by the Bank of Bermuda.

Sentinel investigators slam Bott and Associates

June 30, 2001
Insurance management firm Bott and Associates has been strongly criticized by Bermuda's Registrar of Companies for its lack of help with an investigation into Sentinel Insurance Company.In an affidavit filed at a U. S. Bankruptcy Court, Jeremy Cox stated that Sentinel's Bermuda representative had shown "a disturbing lack of co-operation" with an inquiry into what appears to have been a massive fraud.

British Trade & Commerce Bank sued in Tennessee

June 30, 2001
Dominica-based British Trade and Commerce Ltd., which went into receivership earlier this year, has been named as a defendant in a lawsuit filed in the United States.The lawsuit was filed by Global 3000 LLP, a Delaware Limited Partnership, and Herbert Beck at the U. S. District Court for the Eastern District of Tennessee on June 14, 2001.

SEC sues Ian Renert and Hawthorne-Sterling

June 9, 2001
The Securities & Exchange Commission has filed a civil lawsuit against US-based Ian Laurence Renert and his unregistered, Bahamas-based mutual fund group Hawthorne-Sterling & Co., for an alleged $22 million fraud.   As part of the complaint, an emergency order freezing the assets of both parties was granted on June 7, 2001 by the US District Court in Connecticut.

Gulf Union Bank settles lawsuit brought against former US athlete

May 31, 2001
The liquidators of Gulf Union Bank (Bahamas) Ltd. have reached an out of court settlement with a former professional athlete in the United States who borrowed money from the bank. Fred D. Barnett Jr., who played in the National Football League between 1990 and 1997 for the Philadelphia Eagles and Miami Dolphins, had received a loan of about $70,000 from the bank to buy a sports car, said a bank representative.

Application to liquidate American International Bank

May 31, 2001
Regulators have applied to the High Court of Antigua to remove Edward St. Clair Smith as Receiver of American International Bank and change the bank's status from receivership to liquidation. St. Clair-Smith is opposing the action on the grounds that the bank can still be sold as a going concern and that there is a reputable Caribbean company interested in buying it, said a source.

FIBG liquidator warns creditors to expect no dividend

April 30, 2001
Creditors of the First International Bank of Grenada have been informed by its liquidator that they might get back nothing from the liquidation. In a letter to creditors dated April 23, 2001, FIBG liquidator Marcus A. Wide, of accounting firm PricewaterhouseCoopers, wrote that "there will be a significant shortfall to creditors".

Court hearing scheduled soon in SSBT case

March 12, 2001
The next court hearing at Bahamas Supreme Court regarding an application for the reinstatement of the suspended banking license of Suisse Security Bank & Trust is due to take place later this week but a decision is not expected until later in the month at the earliest.

SSBT Receiver may have breached court injunction

March 8, 2001
As the court battle continues today over the suspension of the banking license of Suisse Security Bank & Trust, it has emerged that the action by the Central Bank of the Bahamas in suspending the bank's license was taken despite an injunction being issued by the Bahamas Supreme Court on March 2, 2001 ordering that such action not be taken.

British Trade & Commerce Bank and Suisse Security Bank & Trust due in court tomorrow

March 7, 2001
British Trade & Commerce Bank and Suisse Security Bank & Trust are both due to go to court tomorrow in Dominica and the Bahamas, respectively, in an attempt to win back their banking licenses. BTCB will be seeking to overturn the revocation of its license last month, while SSBT will be seeking to overturn the suspension of its license on Monday, March 5, 2001.

British Trade & Commerce Bank’s claim of frozen assets not true, says adversary

December 31, 2000
A claim by Dominica-based British Trade & Commerce Bank that its liquidity problem is substantially due to having its assets frozen by a Canadian court is in dispute. The Plaintiffs in the only known lawsuit against BTCB in Canada told Offshore Alert that no assets have been frozen as a result of the action, which contradicts BTCB's public stance.

Bahamas-based Surety Bank to go into liquidation

November 30, 2000
Bahamas-based Surety Bank & Trust is to go into voluntary liquidation after its banking license was suspended by the Central Bank of the Bahamas. The license was suspended on November 23, 2000 for a breach of Section 11 of the Banks and Trust Companies Regulations Act, which deals with capital adequacy and reporting requirements.  

Opinion Piece: Bermuda Fire & Marine Insurance settlement

December 31, 1999
The cave-in by the defendants in the Bermuda Fire & Marine Insurance Company trial brings to an end one of the most disgraceful episodes in the history of the island's offshore business sector. Although the standard 'nobody admits any wrongdoing' clause was built into the settlement, it does not take a genius to figure out who won the lawsuit and who lost it.

Privy Council protects liquidators of Cayman firms from misguided debtors

November 30, 1999
The Privy Council in London has issued a ruling that limits the rights of debtors of Cayman-registered entities to seek the removal of liquidators they do not approve of. The decision represents a victory for Christopher Johnson and John Dinan, of PricewaterhouseCoopers, and a defeat for rival accounting firm Deloitte & Touche.

‘Nothing unusual’ about turn-over of Cayman bank records to US Receiver, say Cayman attorneys

August 31, 1999
Although much has been made overseas of a decision by the Grand Court of the Cayman Islands to approve a request to hand over the bank records of Euro Bank Corporation client Kenneth Taves to his US-based Receiver, there is nothing unusual about such a move. The foreign press has been lauding the deal as a break with tradition by Cayman after comments to that effect by Robb Evans, the Receiver for Kenneth Taves, his wife, Teresa; and their businesses J. K. Publications Inc., MJD Service Corp., TAL Services Inc. and their affiliates and subsidiaries.

Liquidators of Telecheck group prepare to pay final dividend

June 30, 1999
The liquidators of Televest Ltd. and Telecheck Holdings Ltd., which went bust on December 15, 1993, have announced they will soon pay a final dividend to creditors. Although accounting firm Kempe and Whittle have no amount for the dividend, creditors have been told in the past to expect a total payment of between 21 and 37 cents on the dollars.

Worldwide International Bank goes into receivership

June 30, 1999
Antigua-licensed Worldwide International Bank has officially been placed into receivership after the failure of a last-ditch bid to stop the process by the bank's owner, Antiguan Joan De Nully.

Star Capital Fund investor criticizes Cayman Islands Monetary Authority

April 30, 1999
A Canadian investor in the failed Star Capital Fund has criticized regulators in the Cayman Islands over their lack of interest in investigating apparent illegalities in the operation and liquidation of the mutual fund. Alan Hammaker, who lost US$20,000 in the fund, said his experience as a foreign investor in a Cayman mutual fund has left him disillusioned not only with the island but with the offshore world in general.

Melvin Ford’s plan to buy American International Bank falls through

December 31, 1998
A proposal to buy American International Bank Ltd. that was put forward by a businessman with a history of operating shady schemes has fallen through, we have been told. AIB's receiver, Edward St. Clair Smith, is now believed to be trying to sell the insolvent bank to other interested parties for $3.5 million, according to a source.

FEDEBANK put into court-appointed administration

December 31, 1998
Roy McTaggart and Frederico A. Golcher, of KPMG in the Cayman Islands and Costa Rica, respectively, have been appointed as controllers of the Cayman-registered Federated International Bank Limited or FEDEBANK, as it is known.

Ultimatum for bankrupt who hid assets offshore

August 31, 1998
A former high-flying Wall Street options trader who fell on hard times has been given a difficult choice by a Miami bankruptcy judge: either hand over the estimated $7 million that he placed in an offshore trust to avoid paying his debts or never have his $20 million bankruptcy discharged. This novel approach to combating debtors who hide their money offshore rather to avoid paying their debts was adopted by Judge Thomas A. Utschig.

GTE Re applies to wind-up Belvedere Insurance in dispute over $9M fee

July 31, 1998
A dispute between Belvedere Insurance and GTE Reinsurance Company, which are both based on the island, turned ugly this month when the latter applied to Bermuda Supreme Court to have the former wound up. The irony of GTE Re's application is that the company is believed to be a net debtor of Belvedere's, rather than a net creditor.

Court rejects Price Waterhouse bill of $76 m for 63 days of liquidation work

July 31, 1998
A Hong Kong judge has hit out at the provisional liquidators of the Bermuda-registered Peregrine Group after they and their legal advisers charged fees of $76 million for just 63 days of work. Doreen Le Pichon, Judge of the Court of First Instance High Court, said she was "greatly troubled by the amount involved" and refused to accept the charges of accounting firm Price Waterhouse and its legal advisers unless they could prove the work was reasonable and necessary.

Bermuda Fire & Marine liquidators rejected $10-$15 m offer to settle lawsuit

July 31, 1998
Defendants in a fraud lawsuit involving Bermuda Fire & Marine Insurance Company made an offer last year of between $10 million and $15 million to settle the case, OffshoreAlert can reveal. However, Bermuda Fire's liquidators, Ernst & Young, rejected the offer on the grounds that it fell substantially short of what was acceptable, said a source whose company is owed money by Bermuda Fire.

Mark Hardy’s bankruptcy annulled in the UK

July 31, 1998
The bankruptcy of former Bermuda-based businessman Mark Hardy has been annulled in London, OffshoreAlert can reveal. Creditors of seven failed Hardy companies, including Forum, Focus and Aneco, which were all based in Bermuda, agreed to the annulment three months ago in return for Hardy signing over various assets and debt recovery rights relating to his failed business empire.

Kemper Re settles with EMLICO liquidators

June 30, 1998
Kemper Reinsurance and the Bermuda-based joint liquidators of Electric Mutual Liability Insurance Company have announced a settlement of their long and acrimonious dispute over EMLICO's insolvency.

Gulf Union (Bahamas) finally goes into permanent liquidation

March 31, 1998
After a hearing that lasted half a day, the Bahamas Supreme Court officially placed Gulf Union Bank (Bahamas) into liquidation on March 26 but deferred a decision on whether to appoint the current provisional liquidators as permanent liquidators. The court first ruled on two preliminary legal issues regarding the competence and appropriateness of the National Insurance Board, which is a government agency, in being allowed to petition for the winding-up of the bank.

BCCI liquidator wins High Court judgment

March 31, 1998
The liquidator of the Bank of Credit & Commerce International has won a High Court judgment in London for £17 million ($28 million) against former employees and relatives of a loans officer at the bank, which was closed in 1991. Two million pounds of the total, representing the value of four residential properties and a unit on an industrial estate in London, will be available immediately to the liquidator, Deloitte & Touche, reported the Financial Times newspaper.

‘Stolen’ Cayman bank records in hands of the IRS

October 31, 1997
The liquidator of Cayman-based Guardian Bank & Trust (in liquidation) has lost a petition he filed against the US government for the return of a computer tape containing details of accounts held at the bank.John Mathewson, the former chairman of the bank, handed over the tape to the FBI in June, 1996, as part of a plea bargain agreement after he was charged with money laundering offences in New Jersey.

Details about the collapse of First Cayman Bank

October 16, 1997
Two loans - one of more than $5 million to the owner and another of about $10 million to Texas oil-man Tom Hajecate - form a major part of the Cayman Islands Monetary Authority inquiry into the collapse of First Cayman Bank, Offshore Alert can reveal. These and further details about the bank's financial problems have emerged over the last few days - a period in which this newsletter has been threatened with legal action by government minister McKeeva Bush, who is a director of First Cayman, and warned by his lawyer that we faced criminal prosecution if we continued to pursue the story.