Stanford International Bank Ltd & Ors, Re

For cross-border insolvency recognition, a company’s centre of main interests is determined by objective factors that are ascertainable by third parties. The registered office creates a true presumption, and the burden of rebutting it lies on the party asserting a different centre. Relevant information is generally that in the public domain or discoverable in the ordinary course of business.

A receivership qualifies as a foreign proceeding only where its powers and duties, viewed cumulatively, relate to collective reorganisation or liquidation under insolvency law. A receivership established principally to preserve assets pending investor-protection proceedings does not qualify. The Cross Border Insolvency Regulations 2006 supplement, rather than abolish, the common-law jurisdiction to recognise foreign representatives.

The applications concerned competing recognition claims arising from the collapse of Stanford International Bank Ltd (“SIB”). A receiver had been appointed by the United States District Court for the Northern District of Texas in proceedings brought by the Securities and Exchange Commission. Liquidators had been appointed by the Antiguan court after SIB was wound up.

Both applicants claimed recognition under the Cross Border Insolvency Regulations 2006, asserting that their respective appointments arose from foreign main proceedings. The issues were whether the United States receivership was a foreign proceeding and whether the Antiguan liquidation was a foreign proceeding, and, if so, whether Antigua was SIB’s centre of main interests.

1. Receivership. The United States receivership was not a foreign proceeding. The order’s purpose was to prevent waste and dissipation, not to liquidate or reorganise the defendants’ estates. Its operative duties concerned gathering, preserving and managing assets. It did not confer power to distribute assets, and the underlying SEC proceedings concerned alleged investor-protection violations rather than insolvency. The receiver was therefore neither entitled to recognition under the Regulations nor, in respect of SIB, entitled to common-law recognition.
2. Antiguan liquidation. The Antiguan liquidators were appointed pursuant to a law relating to insolvency. Although the petition relied on section 300 of the International Business Corporations Act, the Antiguan court had considered evidence of SIB’s insolvency and inability to be reorganised and had ordered liquidation and dissolution under the Act.
3. COMI. The relevant COMI was SIB’s own COMI, not that of persons alleged to have controlled it. The registered office in Antigua created a true presumption. The Receiver bore the burden of rebutting it with factors both objective and ascertainable by third parties. Behind-the-scenes fraud, undisclosed management arrangements and the location of assets were insufficient. SIB’s Antiguan headquarters, staff, regulation, contracts, marketing and customer-facing operations reinforced the presumption. Antigua was therefore SIB’s COMI, and the Antiguan liquidation was a foreign main proceeding.
4. Common law and relief. The Regulations supplemented the common law. The Receiver was recognised at common law in respect of Sir Allen Stanford, Stanford Trust Company Ltd and other United States entities where a sufficient connection with the United States existed. The Antiguan liquidators were directed to take possession of SIB’s assets in England and were permitted to remit them to Antigua, consistent with the policy favouring a single liquidation.