Seán Quinn family permitted to proceed with loans claim

Quinns claim €2.34bn loans were made unlawfully to prop up Anglo’s share price

Seán Quinn: the businessman’s family’s case, initiated in May 2011, is expected to last more than six months and has been brought against Irish Bank Resolution Corporation. Photograph: Collins

Seán Quinn: the businessman’s family’s case, initiated in May 2011, is expected to last more than six months and has been brought against Irish Bank Resolution Corporation. Photograph: Collins

 

A High Court judge has permitted the family of businessman Seán Quinn to proceed with claims in their forthcoming legal action that some €2.34 billion loans by Anglo Irish Bank to various Quinn companies were made for the unlawful purpose of propping up the bank’s share price.

However, the Quinns cannot continue to pursue those aspects of their claim alleging the loans are unenforceable, Mr Justice Robert Haughton ruled.

He was making final directions concerning management of the hearing, due to open on June 3rd, of the action by Mrs Patricia Quinn and her five adult children aimed at avoiding liability for the €2.34bn loans.

The judge was told the family do not intend to appeal his ruling last week preventing them amending their claim to include a claim they were innocent parties to the loan transactions with the effect, they argued, the loans could not be enforced against them.

The family’s case, initiated in May 2011, is expected to last more than six months and has been brought against Irish Bank Resolution Corporation and its special liquidator Kieran Wallace.

The Quinns dispute the validity of share pledges and guarantees provided as security for loans made by the former Anglo Irish Bank to Quinn companies. Those loans, the Quinns claim, were made for the unlawful purpose of propping up the bank’s plummeting share price.

The defendants previously joined Seán Quinn senior and two former senior executives of the Quinn group, Liam McCaffrey and Dara O’Reilly, as third parties. The bank claims the third parties at all times acted as agents of the Quinns concerning the execution of share pledges and guarantees. The Quinns deny those claims.

Yesterday, the judge refused the bank’s application to have deleted from the Quinns’ claim those sections alleging the loans were unlawfully made but he directed that those parts of the claim alleging the loans were unenforceable could be deleted.

The bank’s application arose following a Supreme Court decision last March that, even when made for unlawful purposes, loans could still be enforceable.

Also yesterday, Shane Murphy SC, for IBRC, said his side intended to bring a motion during next month’s hearing against Seán Quinn sr seeking judgment against him in this case.

Counsel indicated the motion arose from a previous decision by the Official Assignee in bankruptcy not to defend the bank’s application for judgment against Mr Quinn. The Assignee’s decision was made while Mr Quinn was still a bankrupt and, under bankruptcy legislation, a bankrupt cannot bring or defend court proceedings on their own behalf.

Mr Quinn has since exited from bankruptcy, Mr Murphy observed.