SEC v. Stanford International Bank, Ltd.

Summarized by Peter Ruggero , Ruggero Law Firm PC
14 years 8 months ago

Citation:

Case No. 10-10387 (5th Cir. June 20, 2011)

Tag(s):

5th Circuit

Ruling:

The Court of Appeals for the Fifth Circuit affirmed the district court's denial of condominium association's motion to intervene in receivership litigation and motion to lift the stay of proceedings related to receivership. The Court of Appeals set forth a three factor test when considering whether a stay of proceedings involving a receivership should be lifted. The Court of Appeals further set forth the requirements for mandatory and permissive intervention.

Procedural context:

Appeal from the U.S. District Court for the Northern District of Texas' denial of: (i) motion to intervene in receivership litigation, and (ii) motion to lift the stay of proceedings related to receivership. Affirmed on appeal.

Facts:

Stanford Condominium Owners Association (the "Condo Association") brought suit in Texas state court for faulty construction against Stanford Development Corporation (the "Development Corporation"). The Condo Association and Development Corporation proceeded to arbitration. The arbitration, however, was stayed after the Securities and Exchange Commission (the "SEC") sued Allen Stanford and all Stanford entities for an alleged Ponzi scheme. In the SEC's lawsuit, the District Court appointed a receiver and enjoined all proceedings against any Stanford entities. The Condo Association moved to intervene in the receivership litigation or, alternatively, lift the stay so as to proceed with arbitration.

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