THE FAMILY of bankrupt businessman Seán Quinn are effectively making the “extraordinary” case they have no liability for loans of €2.3 billion advanced to support Anglo Irish Bank’s share price on the grounds that Mr Quinn and the bank were engaged in the “criminal offence” of market manipulation, the bank has told the Commercial Court.
The hearing of the case as advanced by the family would involve an extensive examination by the court of the conduct of the bank and Quinn companies. It could take up to nine months and cost millions of euro, including an estimated €1 million cost of discovering up to 900,000 documents being sought from the bank, Paul Gallagher SC, for the bank, said yesterday.
He was opening the hearing of the bank’s application, before Mr Justice Peter Kelly, for orders directing a preliminary hearing to determine key issues in the family’s case. The bank says that would lead to a narrowing of the issues saving “enormous” costs and court time.
Mr Gallagher said the family was advancing a case that Mr Quinn “masterminded” a strategy of building up an investment in Anglo via a company owned by his five children, but did “all of this gambling” as an agent for Anglo and exerted undue influence in relation to his family signing guarantees and share pledges over huge loans without their knowing what was involved. But the family had brought no case against Mr Quinn and instead alleged the bank acted in breach of fiduciary duty and duty of care to them.
The family contended the loans were not recoverable and they were entitled to take over “the Quinn empire again” free of debt, counsel said. To support that “extraordinary” claim, they had to allege criminal conduct.
The court heard Mr Quinn’s children alleged they did not know a structure was set up in 2005 involving each of them owning 20 per cent of a company, Bazzely, used for CFD (contracts for difference) transactions in Anglo.
The family is resisting an application for a preliminary hearing. Patricia Quinn and her children – Ciara, Colette, Brenda, Aoife and Seán Quinn Jnr – began their action earlier this year.
Anglo has denied their claims and has joined Seán Quinn Senior and two 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 case. The bank’s application continues on December 15th.
