Quinn-linked property loan pledge 'a worthless promise'

A MULTIMILLION pound loan agreement on international property linked to bankrupt tycoon Sean Quinn is hardly worth the paper it is written on, the High Court in Belfast heard today.

As lawyers for an offshore company being sued over the debt transfer came off record, a judge was told the whole process was a sham.

The Irish Bank Resolution Resolution Corporation (formerly Anglo Irish Bank) is seeking an order enabling it to claw back a $45 million assignment on assets including a Ukrainian shopping centre once owned by Mr Quinn’s family.

It has brought a case against the British Virgin Islands-registered Lyndhurst Development Trading in a bid to seize the mall in Kiev as part of a bid to recoup more than £2 billion from the businessman.

The bank fears assets may have been stripped to prevent it securing the money it claims to be owed. A chain of loan assignments were under scrutiny in the case. The first was from Fermanagh firm Demesne Investments, which Mr Quinn was a director of, to Innishmore Consultancy, another Northern Ireland company run by his nephew Peter Quinn.

From there the debt was transferred on to Lyndhurst.

With Demesne having been switched to a joint-plaintiff, and Innishmore offering no defence in the case, the bank’s action focused on Lyndhurst alone.

It was claimed that, within insolvency law, the assignment involved a massive undervalue.

Gabriel Moss QC, for the bank, told the court Mr Quinn was “causing Demesne to strip out his property in favour of a company (Innishmore) owned and controlled by his nephew Peter Quinn”.

Turning to the transfer to Lyndhurst, he said there was no evidence any of the $45 million had been paid. In his view any pledge from such a company to come up with the money had no weight.

“A promise from perhaps Rothschild or even the Royal Bank of Scotland might be worth something, whereas a promise from a shelf company is hardly worth the paper it’s written on,” he said.

He said it amounted to “a worthless promise from a worthless company”. A written agreement to pay the debt was not genuine, the barrister said: “That is a sham consideration set out there.”

Submissions were made in the absence of any lawyers for the defendant. Lyndhurst’s legal team withdrew from the case with the court’s approval before the main hearing got under way.

With proceedings against the Quinn family also ongoing in the Republic, Mr Moss argued that the motive for the assignment to Lyndhurst was clear.

“The purpose of it was plainly on the part of Peter Quinn – this is confirmed by his evidence in the South – to make sure the property went out from the reach of the bank and Demesne.”

Mr Justice McCloskey is due to deliver judgment later this week.