Liquidations & Insolvencies

Colorado's banking regulators have closed down the state's last remaining 'offshore bank', claiming the institution is "hopelessly insolvent" and its managers untrustworthy. American Intercapital Holding, LLC, doing business as American Intercapital Depository & Trust and formerly known as American International Depository & Trust, was placed in "immediate involuntary liquidation" by an order of the Colorado Division of Banking's State Banking Board on November 19, 2007 immediately following an emergency meeting. State Banking Commissioner Richard Fulkerson has been appointed liquidator and Philip Feigin, a former Colorado State Securities Commissioner now working for the law firm of Rothgerber Johnson & Lyons LLP, as Deputy Receiver.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in Switzerland by Peter Lutz and Romeo Da Rugna, as the Foreign Representatives of Tradex Swiss AG, at the U. S. Bankruptcy Court for the District of Massachusetts.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in Canada by Robert Hardie, as the Foreign Representative of John Francis Quinn, at the U. S. Bankruptcy Court for the Middle District of Florida.

Complaint in Condor Insurance Limited (In Official Liquidation) v. Condor Guaranty, Inc., PetroQuest Resources, Inc., Harvey Milam, Byron Tyghe Williams, Ross N. Fuller, T. Alan Owen, Intercontinental Development and Investment Corporation, Gymnogyps Management, Inc., and Finpac Holdings, Inc. at the U. S. Bankruptcy Court for the Southern District of Mississippi.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in the United Kingdom by Jeremiah O'Sullivan, as the Foreign Representative of Jonathan Loy, at the U. S. Bankruptcy Court for the Eastern District of Virginia.

Complaint in USA vs. Bank of Cyprus Plc at the U. S. District Court for the Southern District of New York.

The net deficit of Legion Insurance Company, a former operating subsidiary of Bermuda-based Mutual Risk Management Ltd., increased by $8 million to $622 million in the first six months of 2007, according to the latest liquidator's report. At June 30, 3007, Legion had assets of $2.73 billion and liabilities of $3.35 billion, reported the Commonwealth of Pennsylvania Insurance Department, which is liquidating Legion.

Complaint in Marc S. Kirschner, as Trustee of the Refco Litigation Trust v. Jasso AG at the U. S. Bankruptcy Court for the Southern District of New York.

The Cayman Islands-based provisional liquidators of two Bear Stearns hedge funds have suffered a legal setback in the United States, where a federal judge refused to recognize the liquidations.

Affidavit of Hywel Jones in support of an asset freeze order and receivership application in Lester Turnquest, Jr. and The Bonnycord Group Limited v. Hywel Jones, The Britannia Group Ltd., Hampton Insurance Company Limited, and Stephen Dickson at Bahamas Supreme Court. The affidavit includes a section entitled 'Physical attacks on me'.

A bank and seven investment funds all domiciled in Caribbean countries are among the 20 largest unsecured creditors of a U. S. based investment adviser that has filed for bankruptcy in Chicago and is being sued for fraud by the

The principals of Condor Insurance Limited, which was recently forced into liquidation in Nevis amid allegations of fraud, have set up an identical business in the Bahamas. Even the name of the new company is similar to the old one.

Public Notice by the Cayman Islands Monetary Authority announcing the liquidation of GIAMO Fund Ltd.

Winding Up Petition in Banca del Gottardo S.A. Luxembourg Branch v. Avendis Global Fund Ltd. at the Grand Court of the Cayman Islands.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in the Cayman Islands by Hugh Dickson, Stephen Akers, and Paul Billingham, as the Foreign Representatives of Basis Yield Alpha Fund (Master), at the U. S. Bankruptcy Court for the Southern District of New York.

Request for Judicial Assistance by Liberia In the Matter of CIGNA Worldwide Insurance Company.

A bank and seven investment funds all domiciled in Caribbean countries are among the 20 largest unsecured creditors of a U. S.-based cash management firm that has filed for bankruptcy in Chicago.

KPMG and Citco Fund Services in the Netherlands Antilles have been dragged back into litigation concerning a failed British Virgin Islands-registered hedge fund called Dobbins Offshore Ltd.A new lawsuit was filed against KPMG and Citco at the U. S. District Court for the Northern District of Texas on July 11, 2007 - nearly 13 months after they were dismissed on jurisdictional grounds from a previous action at the same court.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in the Cayman Islands by Simon Whicker and Kris Beighton, as the Foreign Representatives of Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd., at the U. S. Bankruptcy Court for the Southern District of New York.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in Nevis by Richard Fogerty and William Tacon, as Foreign Representatives of Condor Insurance Limited, at the U. S. Bankruptcy Court for the Southern District of Mississippi.

Accounting group PricewaterhouseCoopers has agreed to pay $22.5 million to settle claims regarding its audits of the fraudulently-operated Lancer Offshore group of hedge funds, which collapsed in 2003 with losses estimated at more than $400 million.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in the United Kingdom by Jan Endresen, as the Foreign Representative of Oslo Reinsurance Company ASA and Oslo Reinsurance Company (UK) Limited, at the U. S. Bankruptcy Court for the Southern District of New York.

A contempt of court motion has been filed in the United States against a Bermuda-based firm that manages several hedge funds registered in the British Virgin Islands and also has ties to Canada and Switzerland.Lake Shore Asset Management Limited, which is believed to manage at least $466 million, has refused to turn over documents to the Commodity Futures Trading Commission in breach of a Statutory Ex-Parte Restraining Order issued seven days earlier, stated the regulator in its contempt motion at the U. S. District Court for the Northern District of Illinois on July 3, 2007.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in Bermuda by Tamsin Walker, as the Foreign Representative of Arion Insurance Company Limited, at the U. S. Bankruptcy Court for the Southern District of New York.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in the United Kingdom by Philip Heitlinger, as the Foreign Representative of AXA Insurance UK Plc, Ecclesiastical Insurance Office Plc, GLOBAL General and Reinsurance Company Limited, and MMA IARD Assurances Mutuelles, at the U. S. Bankruptcy Court for the Southern District of New York.

Condor Insurance Ltd. went into liquidation at the High Court of St. Kitts and Nevis on May 18 following a petition by New York Stock Exchange-listed Infineon Technologies AG, which is registered in Germany.Richard Fogerty, of Kroll (Cayman) Limited, and William Tycon, of Kroll (BVI) Limited, were appointed joint official liquidators. Another creditor, Pro Med Reinsurance Limited, which, like Condor, is incorporated in Nevis, was granted permission to appear in the liquidation.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in Japan by Go Ishikawa, as the Foreign Representative of Three Estates Company Ltd., at the U. S. Bankruptcy Court for the Eastern District of California.

Two subsidiaries of alternative investment provider Man Group Plc are seeking to avoid providing details about 24 Cayman Islands funds for use in legal proceedings concerning the collapse of Philadelphia Alternative Asset Management Company, LLC.It is part of the legal

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in the Isle of Man by Laurence Keenan, as the Foreign Representative of Spencer Partners Limited, at the U. S. Bankruptcy Court for the District of South Carolina.

KPMG (Vanuatu) is among several defendants who are being sued for $45 million in damages by the Receiver of a failed viaticals company that was allegedly operated as a Ponzi scheme.The lawsuit was filed by Michael J. Quilling, as Receiver for ABC Viaticals Inc. and related parties, at the U. S. District Court for the Northern District of Texas on March 6, 2007.The defendants are International Fidelity & Surety Limited and International Consultants & Management Ltd., both “allegedly” incorporated in Vanuatu, sharing the same registered agent of Trusco Holdings Limited, at Hawkes Law House, Rue Pasteur, Port Vila, Vanuatu; Surety Marketing Source LLC, incorporated in Michigan; KPMG (Vanuatu), a partnership organized in Vanuatu; Hawkes Law, a Vanuatu accounting firm which has a correspondent relationship with KPMG; KPMG International, organized in Switzerland; Boswell Dermott & Pawlett LLP, formed in the United Kingdom; Mohan & Associates, incorporated in India; David A. Goldenberg, a resident of Michigan; DAG Investments LLC, incorporated in Michigan; LPG Investments LLC, incorporated in Michigan; WED Marketing LLC, incorporated in Michigan; Galax Holdings Ltd., based in the United Kingdom; Mark Wolok, a resident of Michigan; Linda Wolok, a resident of Michigan; and Arie Kotler, a resident of Manhattan, NY.

The Receiver of a failed hedge fund group that was partially based in the Bahamas has filed a civil complaint against a Cayman Islands hedge fund in an attempt to recover $48,700.Arthur Steinberg, of New Jersey, filed a complaint at the U. S. District Court for the Southern District of New York on February 15, 2007 in his capacity as Receiver for Northshore Asset Management LLC, which is based in Chicago, Illinois; Ardent Research Partners L.P., organized in New York; Ardent Research Partners Ltd., incorporated in the Bahamas; Saldutti Capital Management, L.P., organized in New York; Kevin Kelley, a resident of Greenwich, Connecticut; Robert Wildeman, a resident of Chicago, Illinois; and Glenn Sherman, a resident of Chicago, Illinois. The sole defendant is M. Kingdon Offshore Ltd., a hedge fund that is organized in the Cayman Islands and whose shares are listed on the Cayman Islands Stock Exchange.

After a contested legal battle that lasted more than eight months, two former principals of the fraudulently-operated Evergreen Security offshore mutual fund - and a Florida investment firm they ran - have been forced into bankruptcy in the United States.Involuntary Chapter 7 bankruptcy petitions against Jon M. Knight, of Sorrento, Florida; J. Anthony Huggins, of Orlando, Florida; and their Florida corporation Atlantic Portfolio Analytics & Management Inc. were approved at the U. S. Bankruptcy Court for the Middle District of Florida on March 29, 2007.

The net insolvencies of two former operating subsidiaries of Bermuda-based Mutual Risk Management Ltd. rocketed from $334.3 million to $852.6 million in 2006, according to their liquidator. The deficits of Legion Insurance Company and Villanova Insurance Company increased from $225.3 million to $614 million and from $109 million to $238.6 million, respectively, during the year.

Securities broker Bear Stearns Securities Corp. has been ordered to pay $159 million to the estate of a failed offshore hedge fund for ignoring red flags about the fund's fraudulent operating practices. The judgment at the U. S. Bankruptcy Court for the Southern District of New York is a huge boost for creditors of the British Virgin Islands-registered, New York-based Manhattan Investment Fund Ltd., whose net insolvency before the ruling was $391 million.

Arthur Andersen has agreed to pay $1.2 million to settle litigation regarding its audits of now-defunct Bermuda-based broker AlphaStar Insurance Group Limited, formerly Stirling Cooke Brown Holdings. A motion to approve the settlement was filed with the U. S. Bankruptcy Court for the Southern District of New York on February 16, 2007 by AlphaStar's Chapter 7 Trustee, Richard E. O'Connell. The deadline for objections to the Andersen agreement is March 8 and a hearing to approve it is scheduled to be held on March 13.

Colorado's banking regulator has taken legal action in an attempt to close down American International Depository & Trust, which bills itself as the “first Old-World International Private Bank in the United States”. AIDT is defending the action at Colorado's Office of Administrative Courts and has obtained an order sealing the case in an attempt to limit the damage to its business.

Writ of Summons filed by TCB Creditor Recoveries Ltd. against Morris Cottingham & Co., formerly known as Morris Cottingham & Co., at the Grand Court of the Cayman Islands.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in the Cayman Islands by David Walker and Lawrence Edwards, as the Foreign Representatives of Amerindo Internet Growth Fund Ltd., at the U. S. Bankruptcy Court for the Southern District of New York.

Fund administrator UBS Fund Services (Cayman) Ltd. has been dragged into litigation concerning a hedge fund group that allegedly concealed $179 million of losses from investors before collapsing. On January 22, 2007, UBS was added as a third-party defendant to an action that was started nine months ago at the U. S. District Court for the Eastern District of Pennsylvania against Delaware-incorporated, New York-based futures broker Man Financial Inc. and others by C. Clark Hodgson, Jr., as Receiver for Philadelphia Alternative Asset Management Company, LLC (“PAAMCo”), Philadelphia Alternative Asset Fund, Ltd. (the “Offshore Fund”), Philadelphia Alternative Asset Feeder Fund, LLC, Philadelphia Alternative Asset Fund, LP, and Option Capital Fund, LP. The case has been set for trial in May, 2007.

The Receiver for the Lancer Offshore Group has filed two new complaints against recipients of money transfers that were made while the failed hedge fund group was insolvent. In one case, the defendants are Redwood Financial Group Inc., The Redwood Group Inc., both of Redwood Drive, Westminster, Maryland; Robert D. Maum, of Cowdray Park Drive, Greenwich, Connecticut; and James W. Raker, of Wynfield Road, West Friendship, Maryland. In the other action, the defendants are attorney Kenneth E. Chyten and the Law Offices of Kenneth E. Chyten, both of Santa Monica Boulevard, Los Angeles, California.

Fraudulent conveyances totaling “millions of dollars” were made from Bahamas-based Leadenhall Bank & Trust Limited just before the bank went into voluntary receivership in 2005, it has been claimed. The allegation was made in a filing at the U. S. District Court for the Southern District of Florida by class action attorneys pursuing a claim for $100 million against the bank on behalf of approximately 2,300 victims of a Ponzi scheme known as Cash 4 Titles.

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in Barbados by Marcus Wide, as the Foreign Representative of Bancafe International Bank Ltd., at the U. S. Bankruptcy Court for the Southern District of Florida.

Public Notice by the Cayman Islands Monetary Authority announcing the liquidation of Amerindo Internet Growth Fund Ltd.

A Toronto-based group controlled by a former janitor that specialized in helping Canadians move their money offshore has collapsed owing more than US$10 million to at least 25 creditors.Details are contained in court filings at the Ontario Superior Court of Justice, where Sabourin and Sun is in litigation with Judith Laiken, an elderly client who claims to have been defrauded.

A Bermuda-licensed insurer that is insolvent by an estimated $7 million forged a fake accounting document in the name of Deloitte & Touche in the Cayman Islands to try to convince regulators it was solvent, according to its provisional liquidators.The alleged ploy did not work, however, and Hatteras Reinsurance Limited was petitioned into provisional liquidation “in the public interest” by the Bermuda Monetary Authority at Bermuda Supreme Court on June 7, 2006.

A former director of a fraudulently operated, offshore stock broker has agreed to pay US$74,000 - purportedly 75% of his total assets - to settle a civil complaint brought by the firm's liquidators.As part of his settlement agreement, James Fontanetta

Notice of Filing of Statement of Financial Affairs and First Report to Creditors in the matter of Hatteras Reinsurance Ltd. at the U. S. Bankruptcy Court for the Southern District of New York.

Investors in a failed Bahamas based investment fund have secured a $3.8 million settlement of a civil complaint filed in the United States against the Fund's liquidator and its former banker.Under the terms of the settlement, investors in MJ Select

The Bank of Cyprus is being sued for $40 million in damages concerning services it provided to an accused fraudster.A civil complaint was filed against the bank at the U. S. District Court for the Southern District of New York

Chapter 15 Petition for Recognition of a Foreign Main Proceeding in the United Kingdom by Shay Bannon and Geoffrey Kinlan, as the Foreign Representatives of Cadman Contracts Limited and Thornycroft (1862) Limited, at the U. S. Bankruptcy Court for the Southern District of New York.