Joint venture is only hope to recover assets, court told
ASSET RECOVERY:A JOINT venture arrangement between State-owned Irish Bank Resolution Corporation and an assets recovery specialist in Russia and Ukraine is urgent and necessary if there is to be any hope of recovering any assets from the Quinn family’s international property group, the bank has told the Commercial Court.
A payment of €31 million will initially be made to the firm, with further substantial payments of tens of millions if they succeed in recovering assets, the court heard. The joint venture agreement is intended to be finalised within days as the situation was urgent if any assets are to be recovered, Paul Gallagher SC, for IBRC, formerly Anglo Irish Bank, said.
The bank was entering into the agreement because it found itself in an “impossible position” in seeking to recover assets from the International Property Group (IPG) and because it had suffered setbacks in recent months, including losing control of the Kutuzoff Tower in Moscow, the most valuable asset in the IPG, he added.
Each time the bank secured some successes in countries such as Russia and Ukraine, the family has moved to reverse those, counsel said. Rejecting claims by the Quinns that the bank was wrongly taking money out of the IPG to pay the Russian company A1, he said the bank was forced to enter into the joint venture accord because of the actions of members of the family.
In a detailed affidavit, Richard Woodhouse of IBRC said the bank believed members of the Quinn family were directing steps to frustrate its attempts to recover assets and the bank believed its best option now was to engage A1.
Mr Justice Peter Kelly noted IBRC had secured the approval of the Minister for Finance to enter into the arrangement with A1, a firm specialising in asset recovery in Russia and Ukraine.
The court had no role to play in this commercial arrangement but the bank was quite properly updating the court about it, the judge added. The bank had said it would keep a record of all payments made and recovered under the arrangement, he also noted.
Niall McPartland, a son-in-law of Seán Quinn, said the family had no control over the assets and the bank continued to reject their efforts to assist in recovering them.
The proposed joint venture accord would mean an automatic loss of €31 million to €51 million and possibly more via payments to A1 in circumstances where the Quinn family disputed the bank had any legitimate security over the IPG assets, he said. “Two wrongs don’t make a right. We shouldn’t have moved the assets when there was a dispute over the debt but the bank is now doing the same thing,” Mr McPartland said.
In a separate ruling yesterday, Mr Justice Kelly dismissed an application by some Quinn family members to discharge Declan Taite as receiver appointed by IBRC over their assets and to also discharge Arthur Cox as solicitors for the receivers. He would give his reasons for that ruling later.