David Drumm to give evidence in Quinn children’s action over €2.34bn Anglo loans
High Court urges Quinn children to consider further mediation in action against IBRC
Former Anglo Irish Bank chief executive David Drumm. Photograph: Cyril Byrne/The Irish Times
Additionally, a High Court judge has urged consideration of a further mediation before trial next March of the marathon litigation whereby Quinn’s children deny liability for loans of some €2.34 billion advanced by Anglo to Quinn companies.
Mr Drumm is among at least 49 witnesses due to give evidence in the case.
On Friday, Mr Justice Michael Twomey issued his plea for mediation when dealing with trial management issues for the action against State-owned Irish Bank Resolution Corporation, Anglo’s successor in title after the bank collapsed and was nationalised in 2008.
The family’s case was initiated in 2011 and could run for six months at costs of several million euro.
Those costs are on top of costs of tens of millions already incurred in the family’s case and in the parallel litigation by the bank against members of the Quinn family and various companies in the Quinn international property group (IPG).
The bank’s case, in which IBRC alleges a conspiracy to strip some €455 million assets from IPG companies in several countries, is due for hearing after the children’s action.
Both cases were put on hold for several years pending the hearing of criminal proceedings against various Anglo executives and officials, including Mr Drumm.
Mr Justice Twomey, who will hear the children’s case, held a case management hearing on Friday.
At the outset, he told the parties that, about 14 years ago, he made a pension linked investment in a company linked to Anglo which was later written down to zero after the relevant property was sold.
He believed he had also sought a quotation, about 25 years ago, for car insurance from Quinn Insurance.
Counsel for both sides indicated they didn’t believe either matter would present a problem but would formally raise them with their clients.
Validity of securities
Bernard Dunleavy SC, instructed by Eversheds solicitors, representing the Quinns, said the nub of the case now was the validity of securities provided by the children concerning loans advanced by Anglo to Quinn companies.
The issues had been considerably narrowed as a result of decisions of the High and Supreme Court, including a Supreme Court ruling the children could not advance claims that loans by Anglo, secured by the disputed share charges and guarantees, were unenforceable on grounds they amounted to unlawful lending in breach of market abuse regulations.
Paul Gallagher SC, and Barry O’Donnell SC, for IBRC, said it maintains the children were of full age and understanding when they signed the relevant documents and they are bound by them.
The bank also claims Sean Quinn senior and Liam McCaffrey and Dara O’Reilly, former Quinn group senior executives joined as third parties to the case, were acting as agents for the children in relation to execution of the disputed securities. The Quinns deny that claim.
The bank also has a counterclaim on foot of guarantees given by the children concerning liabilities of Cypriot companies.
Mr O’Donnell said that counterclaim is for €75 million against each of the children and the bank previously obtained a €121 million judgment against their mother, Patricia Quinn, who is bankrupt, over her guarantee.
Addressing further case management issues, Mr Dunleavy said at least 49 witnesses would be called, including Mr Drumm, and the case was listed for six months. While it would take “a long time”, it may not be that long, he said.
When the judge said he would strongly urge the sides to consider mediation, he was told that was previously attempted in 2015 but the sides would take instructions. Mr O’Donnell said the mediation option had previously been pursued “very seriously” by the sides.
Given the time that has elapsed since, the judge said he considered now was a good opportunity to reconsider mediation.