BANKRUPT BUSINESSMAN Seán Quinn will not be represented in the action being taken by his family to prevent Anglo Irish Bank pursuing them to recover loans of €2.3 billion advanced to companies in the Quinn group, the Commercial Court has heard.
The official assignee in bankruptcy concluded there was no benefit for creditors in Mr Quinn being represented in the proceedings, Mr Justice Peter Kelly was told.
Anglo, now State-owned Irish Bank Resolution Corporation (IBRC), had joined Mr Quinn and two former senior executives in the Quinn group – Dara O’Reilly, chief executive of Quinn Group (NI) Ltd, and Liam McCaffrey, former Quinn group finance director – as third parties to the family’s case against it.
If the family succeeds, the bank will seek to be indemnified by the three on grounds they were central to the management of the Quinn group and an alleged strategy to make investments to fund contracts for difference (CfD) in Anglo before the end of 2007.
The action, by Patricia Quinn and her adult children – Ciara, Colette, Brenda, Aoife and Seán Quinn jnr – has yet to go to a full hearing.
At the Commercial Court yesterday, Mr Justice Kelly was told by Gavin Simons, solicitor for Seán Quinn snr, that he was no longer receiving instructions and wished to come off record.
Mark Sanfey SC said he was representing the official assignee, in whom all Mr Quinn’s assets and liabilities were vested since he was adjudicated bankrupt earlier this month. The official assignee had interviewed Mr Quinn extensively and had concluded there was no benefit for creditors in Mr Quinn being represented in the family’s proceedings, Mr Sanfey said.
In those circumstances, the official assignee would not be exercising his power to defend the court proceedings.
Mr Justice Kelly said Mr Simons could bring his application next week to come off record.
The Quinn family claims Anglo unlawfully tried to prop up its share price by giving about €2.34 billion in loans to companies in the Quinn group after learning in September 2007 of a 24 per cent Quinn shareholding in Anglo, which could collapse the bank.
They claim the bank sought to have the loans disguised as property and other loans but knew they were to fund margin calls on CfD positions taken out in Anglo by Seán Quinn snr via a Madeira-registered company Bazzely (owned by the Quinn children) so as to avoid the Quinn shareholding coming to public and market knowledge.
The family claims they knew nothing about the CfD positions and were never advised about the nature of documents signed by them concerning the loans. The loans, they allege, are tainted with illegality and the bank is not entitled to recover them under various guarantees and share pledges provided by them. They also claim the bank was not entitled to appoint Kieran Wallace as receiver to various Quinn companies last year.
Anglo denies the family has no liability and has also pleaded part of the bank’s claim relates to substantial sums of several hundred million covered under share charges which both pre-dated and post-dated transactions alleged by the family to constitute market manipulation.
The bank has also claimed the family is making a case that it was Seán Quinn snr who engaged in market manipulation, that he was responsible for the investment strategy and that none of the decisions taken in that regard was ever discussed with them. The bank also contends it was entitled to exercise its rights under the share charges to appoint a receiver.
The hearing resumes before Mr Justice Peter Charleton today of a preliminary issue, whether the family has the required legal standing to rely upon alleged breaches of the market abuse regulations and section 60 of the Companies Act 1963 in support of its claims.
