Getting their Quinn's worth
A light snow falls on Moscow as Judge Tatiana Alekseevna Alandarenko takes her seat in courtroom 11021. An electronic noticeboard lists the cases to be heard today on the 11th floor of the modern building that houses Moscow City Arbitration Court. From 2.40pm on Monday this week, all the cases involve Anglo Irish Bank and a Russian property-management company called Finansstroy. The Irish Times is observing with the help of an interpreter.
Alandarenko, who looks to be in her late 20s and wears a long-sleeved black gown and white bib, is presiding over the latest chapter in the saga of the Quinn family’s foreign property portfolio.
Through the 2000s Seán Quinn used the business he had built up over decades as a basis for borrowing to invest in property. But instead of buying apartments in Dublin or holiday homes in Buncrana, he bought commercial property in the UK, Russia, Turkey and farther afield.
He also began betting on the performance of the bank he was borrowing from: Anglo Irish Bank. Without the bank knowing, he became its biggest shareholder as well as its biggest borrower.
Around April 2011, when the bank moved in to seize everything he and his family owned, he agreed to a proposal put to him by his nephew Peter Darragh Quinn that the family should try to put the international property portfolio beyond the bank’s reach.
These hearings are the latest in a series that are taking place in at least 10 jurisdictions as part of the ongoing war between the Quinns and the State-owned Irish Bank Resolution Corporation (IBRC), which includes the former Anglo Irish Bank.
When the first case is called, a number of young male lawyers with briefcases enter the courtroom. They stand to address the judge, who sits at a slightly elevated bench with a gold crest on the wall behind her.
At issue is about €20 million, money the IBRC says belongs to it and, therefore, to the Irish State.
The money constitutes about a year’s rental income from an office block in Moscow, the Kutuzoff Tower, formerly the jewel in the crown of the international property portfolio put in place by the now bankrupt Seán Quinn as part of his intended inheritance for his five children.
On July 27th, IBRC had an administrator, Alexander Sherykhanov, appointed by the Russian courts to Finansstroy, which runs the Kutuzoff. Sherykhanov replaced Andrei Dimitrov, who the bank believed was acting in the interests of the Quinns. When Sherykhanov entered Finansstroy’s offices in the Kutuzoff in August, he found its computers had been deliberately smashed.
From the broken hard-drives and a back-up server, he retrieved a range of documents, including emails that, according to an IBRC executive, Richard Woodhouse, directly contradict evidence given to the Irish courts by Seán Quinn jnr. The emails, Woodhouse has told the Irish courts, show Quinn was in control of Finansstroy at a time when he had told the courts he had nothing to do with it.
Other documents retrieved show employment contracts for all the Quinn children, apart from Brenda Quinn, providing for six-figure salaries and multimilliondollar severance payments. Other documents show a series of large payments to former staff members, and to the company’s Russian lawyers, among others.
Sherykhanov initiated legal actions in Moscow alleging these latter payments were bogus, part of an asset-stripping scheme put in place by the Quinns. However, on October 11th, a Russian court removed Sherykhanov and reinstalled the former administrator, Dimitrov, following an application from local companies that claim they are owed money from Finansstroy. Woodhouse has told the Irish courts that IBRC believes these companies were operating for the benefit of the Quinn family. The family says this is untrue.
In the Moscow courtroom, parties who have received payments come forward in turn and say their payments were legitimate and were for work done. In each case Russian lawyers acting for IBRC argue that the payments were part of an asset-stripping scheme and were improper, and that the judge should order that they be reversed. The lawyer acting for Dimitrov says he doesn’t have all the documents he needs, and repeatedly asks the judge for adjournments. As the afternoon wears on, Alandarenko grows increasingly irritated.
First up is a middle-aged woman dressed in black slacks and a shiny crimson top. She argues that money paid to the firm she worked for was for the installation and maintenance of alarm and CCTV systems in the Kutuzoff. The bank’s lawyers say they believe the claim is bogus. The lawyer acting for Demitrov says he needs more time.
The judge leaves the room to consider the matter, returns within a matter of minutes and adjourns the case so that further documents can be circulated.
Next up is a young man with blond hair and a well-cut grey suit. He is representing AB solicitors, the Moscow firm the Quinn family has told the Irish courts it engaged to operate its plan to move the assets beyond reach. (The family says it has since lost control of the process and that the firm no longer acts on its instructions.) The man tells Alandarenko his firm provided Finansstroy with legal assistance on two matters in July of this year for a fee of 30 million roubles (about €750,000). He says the payments were legitimate and that they have documents to support them, and he objects to any repayment or adjournment.
Engaged by Quinns
The lawyers acting for IBRC say the firm was engaged by the Quinns to implement an asset-stripping scheme and was paid for this work. They say the July payments were themselves asset stripping. Dimitrov’s lawyer seeks an adjournment, saying he needs to see copies of the documents taken by Sherykhanov from the broken Finansstroy computers.