Cayman Islands court orders liquidation of wine futures group

The parent company of a group of businesses that allegedly duped scores of U.S. physicians with shady investments in wine futures has been put into liquidation by a court in the Cayman Islands.

The Grand Court of the Cayman Islands ordered Paradigm Holdings Ltd. to be placed in official liquidation in August, said Chris Johnson, a joint official liquidator appointed by the court.

Additionally, an investigation found that several of Paradigm's subsidiaries were insolvent, including Architects of Wine Ltd., AVE International Ltd. and Paradigm Wine International Ltd., so they were placed in voluntary liquidation, Johnson said.

The names of some of those companies surfaced in connection with allegations about a supposed scam that targeted as many as 3,000 investors, most of whom were U.S. physicians.

Many plunked down tens of thousands of dollars for wine futures with promises of big returns once the wine's value had appreciated. However, several investors have claimed they never received any money back.

At least four physicians have sued in U.S. courts, naming Architects of Wine and two related companies called Ocean International Marketing Ltd. and Seed International Ltd. At least two of the lawsuits name Paradigm Holdings.

Also, securities regulators in a handful of U.S. states have ordered some of the companies to stop conducting business there. Johnson said authorities in other countries were also investigating the allegations.

Telephone numbers for Ocean International, which authorities believe to be closed, and Paradigm could not be located.

But a Web site identifying itself as being operated by Seed International said that the company has ceased to market new wine contracts, though it continues to service its existing contracts. It also said that Seed has not sold or offered any wine to U.S. residents since spring 2002.

Additionally, the Web site said Seed's management has done its "best to address and, where possible, rectify any historic issues or highlighted anomalies within its business." Seed could not be reached for comment.

But investors who say they still haven't gotten their money back may be out of luck. Johnson said he was unsure how or if investors would be able to get back what they invested.

He said liquidators would decide in coming months whether to pursue action against the firms' directors and other third parties, which could lead to some money for investors.