ANGLO IRISH Bank may seek to draw businessman Sean Quinn into a legal action taken by his wife and five children, who are contesting the repayment of €2.34 billion in loans due to the bank.
The Quinn family is suing the State-owned bank, claiming that loans advanced in 2007 and 2008 are “unenforceable” as they were advanced for “an illegal objective” of manipulating the stock market to support the bank’s share price.
Anglo’s lending was “tainted with illegality” and “intended to support an illegal purpose” in breach of EU market abuse rules, it is argued.
The case draws Anglo, which is the subject of long-running criminal investigations by the Garda and Director of Corporate Enforcement, into a complex civil action with the Quinn family, the bank’s one-time largest shareholder.
The family is seeking hundreds of millions of euro in damages in the largest claim ever to come before the Commercial Court, the division of the High Court that deals with big business disputes.
Anglo consented to the case being fast-tracked into the Commercial Court. In a sign of the complexity and scale of the action, Mr Justice Peter Kelly said a trial was likely to last several weeks.
The judge directed that legal documents be exchanged over the coming months with a view to the case being heard early next year.
The Quinn family owes Anglo almost €2.9 billion, of which the €2.34 billion relates to loans to cover their investment in Anglo’s shares and the resultant losses in the 2008 financial crash.
The bank managed the unwinding of Quinn’s 28 per cent investment in 2008 by lending to his family and 10 customers, and dividing the large shareholding to avoid the dumping of the stock and a collapse of the share price.
The legal action by Patricia Quinn and her five children – Aoife, Colette, Brenda, Ciara and Sean Quinn Jnr – arises from their loss of the Quinn Group, whose interests span cement to hotels.
The bank seized control of the business last month on the back of personal guarantees and pledges given by the family against their shares in Mr Quinn’s group to cover the loans from the bank.
They claim this negligently inflicted economic damage and they are seeking to regain control of the group, which had net assets of €750 million in 2007.
Paul Gallagher SC, the former attorney general representing Anglo, said the bank would consider joining Mr Quinn and others to proceedings.
Aoife Quinn – the only member of the family to swear a statement in the case – said the family injected more than €750 million from “Quinn resources” on an investment based around Anglo’s shares through a company registered on the Portuguese island of Madeira prior to the end of 2007.
