The family of bankrupt businessman Seán Quinn has hinted at a possible legal challenge to the statutory stay which has halted their action alleging the former Anglo Irish Bank unlawfully “shovelled” some €2.34 billion loans into their companies to prop up its plummeting share price.
If the Commercial Court rules the new Irish Bank Resolution Corporation Act liquidating IBRC (formerly Anglo) does not allow for the stay to be lifted, the Quinns “will reserve our position in relation to any steps to be taken later”, their counsel Ross Aylward said yesterday.
Mr Justice Peter Kelly said he was faced with a “conundrum” as there was an issue whether the Act gave any power to the courts to lift what the Act described as an “immediate stay” on all “existing proceedings” against IBRC. There was also an issue whether he could even permit such an application to be brought.
The wording of the Act appeared “very clear” in that it provided for “an immediate stay” on all “existing proceedings” against IBRC, with no entitlement for the courts to lift those stays, as the Act disapplied provisions normally allowed for lifting stays, he remarked.
While the reference to all proceedings might “not be as stark” as it appeared, the exact meaning of the relevant provisions should be thrashed out fully in a hearing on March 7th, Mr Justice Kelly added.
The Quinn action was the first main piece of litigation where the issue had arisen but the outcome of the March 7th hearing would affect many other existing proceedings against IBRC, which appear to be captured by the stay, he noted.
The stay applied only to “existing” proceedings against IBRC and did not prevent the bringing of new actions, he added.
The action by Patricia Quinn and her five children against IBRC was initiated in 2011. They claim they are not liable for €2.34 billion in loans made to Quinn companies on grounds that they were made in breach of section 60 of the Companies Act and Market Abuse Regulations.
While the full hearing of the case has been “parked” pending criminal proceedings against former Anglo chairman Seán FitzPatrick and others, various pre-trial matters were continuing until the IBRC Act was passed last week.
The family’s lawyers were due to inform the judge yesterday whether they intended to proceed with an application to join the Department of Finance and Central Bank as co-defendants with IBRC.
Examination
In court yesterday, Paul Gallagher SC said he was representing IBRC and was instructed by the special liquidators of the bank. He said he could see the issue that arose for the court.
Mr Gallagher also said the IBRC Act was still not available for examination but he did not believe there had been any amendments to the Bill seen by the court. Mr Justice Kelly said it was very unusual and very unsatisfactory that the court and the parties had to operate without a copy of the Act.
Last week, Martin Hayden SC, for the Quinns, said the Act appeared “to sanitise” the family’s claim Anglo had breached section 60 of the Companies Act – which makes it unlawful for a company to advance loans to buy its own shares – in making the €2.34 billion in loans.
The Act raised “many areas of complexity” and drew a distinction between those being sued by the bank and those suing it, he also remarked.
