SIR ALLEN Stanford, the Texan financier accused of operating a $7 billion (€4.8 billion) Ponzi scheme, yesterday lost a court bid to access insurance funds to pay his mounting legal bills. His UK lawyers yesterday withdrew an application to the Chancery Court in London that would have helped Sir Allen access a Lloyd's of London directors and officers insurance policy to pay his legal bills.

The court heard Sir Allen was recently "beaten up in prison" and had been in a "state of unconsciousness". The application, if successful, would have required Ralph Janvey, the US receiver in charge of Stanford's financial empire, to permit Sir Allen to use the proceeds of the insurance policy to defend himself from civil and criminal litigation in the US and elsewhere.

Earlier this week, Mr Janvey obtained an injunction from District Judge Godbey of the northern district of Texas preventing Sir Allen from taking further steps in other courts relating to the insurance policies.

In the US court filing, in which District Judge Godbey ordered Sir Allen to withdraw his UK request, the judge said: "It appears Stanford is purporting to seek relief before another tribunal relating to the policies. Such actions by Stanford both violate the terms of this court's prior orders, as well as threaten to interfere with this court's jurisdiction over the policies."

As a result of the order, lawyers representing Sir Allen withdrew their application in London.

Mr Justice Briggs, who presided over the hearing, ruled that Sir Allen would have to pay the costs of yesterday's hearing in spite of the fact that the application had been withdrawn. - (Copyright The Financial Times Limited 2009)