Quinns' Russian property firm gets creditor protection in Moscow court

A MOSCOW arbitration court granted creditor protection yesterday to a Russian company within the international property group of the family of businessman Seán Quinn.

FinansStroy, a development business, is one of the companies at the centre of the asset-recovery dispute between Anglo Irish Bank and the Quinn family.

Lawyers for Anglo described yesterday’s ruling as “a minor setback” for the nationalised Irish bank, adding it will have adverse effects on the bank’s position as a creditor.

Moscow-based FinansStroy filed for bankruptcy protection in May, arguing it had no immediate means to settle its bills, including obligations to Anglo.

The Quinn family owes Anglo about €2.88 billion, prompting the bank to set in motion legal suits to repossess some of the family’s international property portfolio which includes office blocks, retail buildings, warehouses and logistics centres in Russia.

Judge Eleanora Mironenko said she granted the bankruptcy protection because the plaintiff had proved beyond doubt “it had no intention to hide or run away from its debts”. “The company has also convinced the court that mounting pressure from its creditors left it no other choice but to seek for bankruptcy protection,” she said.

The judge gave the parties 10 days to appeal the decision.

Earlier in the proceedings, the arbitration court judge prevented Anglo lawyer Alexandr Vaneev from arguing the case, saying he had no proper papers to represent the bank.

Mr Vaneev said the court ruling concerning his Magisters law firm “was a proper procedural decision in Russia”.

Anglo will review the decision and will decide whether or not to appeal the ruling after careful consideration, Mr Vaneev said.

FinansStroy’s Quinn-appointed interim director, Andrei Dimitrov, declined to comment after the ruling. Members of the Quinn family were unavailable last night, their spokesman said.

At issue is control over the 20-storey Kutuzoff Tower, the crown jewel of the Quinn family’s property holdings in Russia and one that Anglo says generates the most rental income out of any of Quinn Group’s properties.

The 30,000sq m glass-and-concrete tower is located in one of the key business districts of Moscow, along the Rublyovskoye motorway, and has been a huge success.

It boasts an impressive list of tenants including multinationals such as Coca-Cola, Sony Ericsson, Fortis Life Insurance, Rolf, Comverce Network Systems and AIG.

However, Anglo said the Fermanagh-based Quinn group, which controls Kutuzoff Tower through FinansStroy, has been actively attempting to transfer some of the secured property to other companies to benefit Mr Quinn’s children or grandchildren.

Anglo told the High Court in June that a member of Mr Quinn’s family moved €4.5 million from FinansStroy’s Russian bank account despite a February 2008 agreement with Quinn Finance, one of Mr Quinn’s main companies, that all rental income from the Kutuzoff building would be paid into a designated account.