Some Quinn family members have stripped assets, court told

An application by members of the Quinn family for court orders stopping assets of Quinn companies being moved to Nama ignores the fact those assets have already been stripped by some family members, Irish Bank Resolution Corporation has claimed before the Commercial Court.

If IBRC does recover any of those assets after spending huge sums in Russia, Ukraine and India, the effect of the Quinns getting the orders sought would mean those assets would be impounded pending the outcome of the family’s legal case, senior counsel Paul Gallagher, for the State-owned bank, said.

Counsel said the Quinns had made out no legal basis for the orders as they did not own or control the relevant companies.

He said they should also be refused the orders on grounds including that they came to court with “unclean hands” arising from asset-stripping from companies in their international property group.

The Quinns claim that , unless the orders are made, there will be no funds available to meet a damages claim should the family win their action against the bank. They allege they are not liable for some €2.34 billion loans made by Anglo to Quinn companies in 2007 and 2008 on grounds those loans were allegedly unlawfully made for the purpose of propping up the bank’s share price.

'Ignores completely'
IBRC special liquidator Kieran Wallace said in affidavits the application by Patricia Quinn and her five children "ignores completely" Seán Quinn snr's "grossly reckless speculation in contracts for difference with Quinn Group funds".

Arguments by the family that the Quinn Group was not insolvent in April 2011 when IBRC appointed share receivers over those companies ignored the reality of the financial position, he said.

He said that claims by the Quinns that the companies could have continued repaying some €1.3 billion debt to banks and bondholders were “directly contrary to the facts”, The Quinns claim that they could have repaid the money were were it not for alleged illegal loans made by the former Anglo Irish Bank to Quinn companies.

As of April 2011, the Quinn family owed IBRC €2.8 billion, of which about €2.3 billion was secured by the share charges at issue in the family’s case. Of that, about €1.85 billion was in dispute.

At that point neither the family nor their companies were able to repay the €455 million debt which had been admitted was validly owed to IBRC or the disputed balance, he said.

Ms Justice Mary Finlay Geoghegan yesterday began hearing arguments on behalf of IBRC in the continuing hearing of the Quinns application for orders preventing assets of Quinn companies being sold or moved to Nama by the end of this year in accordance with a direction of the Minister for Finance.

No funds