Inside the world of business
IBRC upheaval leaves Quinns in dark
The impact of this week’s developments on the battle between the Irish Bank Resolution Corporation and the Quinn family remains unclear.
A question and answer document posted on the website of the Department of Finance website says the special liquidators appointed to the IBRC have the power to continue with legal claims heretofore being pursued by the bank.
That would seem to indicate that the liquidators can still seek to retrieve the foreign properties the Quinn family sought to put beyond the bank’s reach. An interesting aside here is whether the deal with the Russian Alpha Group, under which it would retrieve the assets and share the proceeds with the bank, will go ahead.
Richard Woodhouse (above), the senior IBRC executive who swore most of the affidavits in the case, is one of those who is no longer with the bank as of this week. One can imagine that his departure is warmly welcomed up in Cavan.
As for the Quinn family’s claim against the bank that the Quinn Group was seized on the basis of loans that were illegal, the department’s QA says the effect of the IBRC Act “is to place an immediate stay on all proceedings against IBRC that are before the courts” and that claimants who have issued proceedings against IBRC will “now have to pursue and prove their debt to the liquidators. Such claimants will rank as unsecured creditors in the liquidation”.
This would (a) seem to question whether the case can continue, and (b) raise the issue as to whether there is any target now for the Quinns in terms of getting substantial damages. These matters are never straightforward. The argument by the family that the €2.8 billion the banks says the family owes was issued illegally forms part of the family’s defence to the bank’s case on the foreign property portfolio. But even if the issue was aired in court in that context, it would not mean the family would get any damages if they successfully argued the case.
Another issue for the Quinns is the possibility of their loans being moved to Nama after six months , or indeed being bought from the liquidators by some third party before that, and how such developments could affect matters.
Mr Justice Peter Kelly noted in the High Court yesterday that the Act appeared not to give the courts any power to lift the stay on proceedings against the bank.
Constitutional challenge, anyone?
Food for thought for Coveney
The Minister for Agriculture must be reasonably hopeful that he has contained the horse meat scandal for the time being. Simon Coveney was helped to no small extent by the Magdalene laundries report and the promissory note deal, which helped get meat off the front pages.
The damage has been considerable, however, particularly to ABP Food Group, which owned the burger plant at the centre of the storm. But the message coming from the industry and backed by the Government is that a basically sound industry has been compromised by a supply chain itself contaminated by “filler” sourced from Poland either directly or through third parties.
The Government will be doing well if it can hold this line. The reports that some French beef ready meals contained nothing but horse meat raises the prospect of a much deeper and wider problem in the low-cost end of the market.