Representative Receiverships and Cayman Island Liquidation

Receivership Attorney, Liquidation and Claim Administration Lawyer

• SEC v. Charles R. Homa et al. , Case No. 99-CV-6895 (United States District Court for the Northern District of Illinois)
  
  In this matter, Phillip Stenger has been appointed as the receivership attorney over a car title loan company with 36 locations in seven states throughout the South. He sold two jet aircraft and ran an airport "fixed based operation" or "FBO" (basically, a "filling station" for airplanes) in Lawrenceville, Georgia, which is just north of Atlanta. In addition to running the businesses, Mr. Stenger and the Firm assisted the SEC in tracing and recovering assets; locating and identifying investors and creditors; and creating a comprehensive database of investors and marketers to use in the formulation of a distribution plan of recovered assets to propose to the SEC and the Court.
  
  A significant portion of the money raised in this Ponzi Scheme was laundered in the Cayman Islands. At the request of the SEC, Mr. Stenger retained counsel in the Cayman Islands and has now been appointed, along with the partner in charge of the Cayman Islands' office of Ernst & Young, Joint Official Liquidator (similar to receiver) of 57 Cayman companies involved in the Ponzi Scheme. Mr. Stenger also worked closely with Ernst & Young's London criminal investigation and forensic accounting group to trace assets hidden abroad and has been instrumental in pushing efforts to develop a "Protocol" which will permit the filing of a single claims form, whether a claimant's rights are being asserted in the United States, the Cayman Islands or in the Bahamas.
  
  As receiver, Mr. Stenger sued one of the financial institutions involved in the fraud, the Bank of Bermuda, and settled that claim with the Bank (at the same time a parallel class action suit against the Bank was settled) for $67.5 million and served as Settlement Administrator for the resulting settlement fund. Claims were also asserted successfully against others who profited at the expense of innocent investors.

• SEC v. Basic Energy & Affiliated Resources, Inc. et al. (United States District Court for the Eastern District of Michigan)
  
  This case, administered out of the SEC's Chicago office, involves a $45 million Ponzi scheme in which over 2,200 investors located throughout the United States, Canada and Japan invested. Stenger & Stenger is acting as legal counsel to the conservator in this case, Lewis G. Mosburg, Jr. (Mr. Mosburg is a senior principal at Stenger & Stenger). The Firm designed and implemented a distribution plan which classified each investor as either a non-marketer, an insubstantial marketer or substantial marketer (depending on the amount of commissions received), and resolved in excess of 300 classification and amount of claim disputes both through court and administrative proceedings. The Firm also developed and recommended the Plan of Distribution that was eventually adopted by the Court, and administered that Plan. The distribution plan was appealed to the Sixth Circuit Court of Appeals, which upheld that plan as satisfying due process standards. SEC v. Basic Energy & Affiliated Resources, Inc. et al., 273 F.3d 657 (6th Cir. 2001).
  
  The underlying business in this case was an Oil and Gas exploration and production company with assets in Texas, Louisiana, Ohio and Michigan. During the initial phase of the administration, the Firm operated the oil and gas business and eventually sold all the properties. At this point, the Firm has liquidated and is now distributing the recovered assets.
  
  The case has entailed litigation over assets and liabilities of the Estate throughout the country, which significantly increased the assets of the Estate. The firm has also successfully negotiated with Federal and State taxing authorities, which significantly reduced tax liabilities of the Estate.

• SEC v. Sarkissian and Antakli et al. , Case No. 93-74946 (United States District Court for the Eastern District of Michigan)
  
  In this case, administered out of the SEC's Washington, D.C. office, Mr. Stenger was appointed as receiver for the purpose of administering and distributing a disgorgement fund in an insider trading case.

• SEC v. Regald B. Smith , Case No. 7:00 cv 358 (United States District Court for the Eastern District of Kentucky)
  
  In this case, administered out of the SEC's Chicago office, Mr. Stenger is acting as a receiver for Regald Smith who perpetrated a $5.4 million fraud on his brokerage clients while he ran the Pikeville, Kentucky offices of Stifel Nicholas. One of the assets in this case was a vintage used car restoration business, which Mr. Stenger liquidated. Mr. Stenger also sold a partially completed hotel, and various other real and personal properties.

• SEC v. Enterprises Solutions, Inc. et al. , Case No. 00-2685 (United States District Court for the Southern District of New York)
  
  In this case, administered out of the SEC's Washington, D.C. office, Mr. Stenger was appointed as receiver for the purpose of administering and distributing a disgorgement fund in a case involving fraud in the offer and sale of stock.

• SEC v. Beacon Hill Asset Management et al. , Case No. 02-8855 (United States District Court for the Southern District of New York)
  
  In this case, also administered out of the SEC's Washington, D.C. office, Mr. Stenger was appointed as receiver in an SEC action for a New Jersey limited partnership, Safe Harbor Fund, L.P., which was one of three "feeder funds" into a hedge fund, Beacon Hill Master, Ltd., located in the Cayman Islands. The Cayman Islands hedge fund is in liquidation in the Cayman Islands and Mr. Stenger and the managing partner of KPMG (Cayman Islands) are serving as Joint Official Liquidators of the hedge fund. Currently, $321 million has been frozen by the District Court and as Receiver/Joint Official Liquidator.

Our Cayman Islands’ Liquidations practice has given us extensive experience in discovering assets, asset liquidation, and distribution. Contact our Receivership lawyers and Liquidations attorneys today.