€5m offer for any claim by Quinns

The special liquidator of Irish Bank Resolution Corporation has offered to set aside EUR5 million to meet any claim for damages by the family of bankrupt businessman Sean Quinn.

The special liquidator of Irish Bank Resolution Corporation has offered to set aside EUR5 million to meet any claim for damages by the family of bankrupt businessman Sean Quinn.

Fri, Mar 1, 2013, 00:00

The special liquidator of Irish Bank Resolution Corporation has, according to sources, offered to set aside €5 million to meet any claim for damages by the family of bankrupt businessman Seán Quinn should they successfully defend the bank's action against them.

The family want $500 million to be lodged in court to meet any such award and say, given the liquidation of IBRC, unless this sum is lodged, the court should lift injunctions granted against them and freezing orders on their accounts.

Their application for the orders to be lifted or a fortified undertaking for damages in the $500 million sum will be mentioned in the Commercial Court on Monday for the purpose of fixing a date for hearing.

Paul Gallagher SC, for IBRC, told Mr Justice Peter Kelly today he expected the hearing would take at least two hours. Martin Hayden SC, for the Quinns, said they would be filing a reply to the special liquidator's affidavit.

When seeking injunctions in 2011 against the five Quinn children, against three of their spouses - Niall McPartland, Stephen Kelly and Karen Woods - and against Peter Darragh Quinn, a nephew of Seán Quinn, IBRC was required to give undertakings to pay them any damages should they successfully defend the bank's claims they had engaged in a scheme to strip assets from the family's international property group and place them beyond the bank's reach.

The Quinns claim the bank has no legitimate security over those assets.

The bank was also required to give an undertaking for damages when it sought and secured further orders freezing the accounts of the Quinn defendants and appointing a receiver over their assets.

Following the special liquidation of IBRC, formerly Anglo Irish Bank, on February 7th last, the Quinns have questioned its ability to honour those undertakings. They have brought an application seeking either that the court lift the orders or compel the bank to lodge up to $500 million in court pending the outcome of the case.

They have also sought orders requiring IBRC to account for its solvency and assets.

In response to that application, it is understood special liquidator Kieran Wallace will urge the orders to remain in place and will contend the Quinns have no defence to the bank's claim because some of them had admitted there was a scheme to move assets beyond the bank's reach.

According to sources, Mr Wallace, while insisting there is no basis for the Quinns' claim they have or will suffer any significant damage as a result of the orders granted against them, has also offered to set aside €5 million to meet any damages.

In her affidavit grounding the Quinn's application, Aoife Quinn said she understood IBRC is insolvent. It was clear from recent remarks of Mr Wallace that any claim the Quinns may have on foot of the bank's undertakings for damages will rank as "an unsecured debt which Anglo will be unable to satisfy".

The freezing orders have caused considerable loss to her family and it is "no longer just, equitable or conscionable" that they remain in place, she said.

The orders had led to termination of standing orders and direct debits on the accounts of herself, her siblings and other family members which had led to non-payment of a range of expenses, she said.

The "most striking example" was that mortgage payments on Seán Quinn jnr's home were not paid, despite the fact the account from which those payments was to be made was in credit and BBC Bank had appointed a receiver over that property, she added.

The full hearing of IBRC's action has been deferred pending criminal proceedings against former Anglo chairman Seán FitzPatrick and two former senior executives of the bank, Pat Whelan and Willie McAteer.

The hearing of the separate action by Patricia Quinn and her children denying liability for €2.34 billion of loans made by Anglo to Quinn companies on grounds those loans were made unlawfully has been deferred for the same reason.