Family to vigorously contest decision of Swedish court to appoint receiver

THE SWEDISH court’s decision to appoint a receiver to Quinn Investments Sweden represents a serious blow to the Quinn family in their ongoing, and increasingly labyrinthine, legal battle with Anglo Irish Bank over the repayment of almost €3 billion.

In some ways the decision to appoint a receiver, is the inevitable – if delayed – culmination of a process that was set in train in April, when receiver Kieran Wallace was appointed over the Quinn family’s shares in the Quinn Group, including its international property empire.

As part of that process, the receiver reconfigured the boards of Quinn Group and its subsidiary companies, including the Swedish company.

That process hit a stumbling block on May 25th when a Swedish court ruled in favour of the Quinn family that any move to remove the board of directors of Quinn Investments Sweden was invalid and would hinder the rights of shareholders.

Quinn International Property Holdings, however, pressed ahead with a move seeking to install a “bankruptcy receiver” to the company.

The immediate effect of the court’s decision to appoint the receiver is that a new board will be installed, after which the receiver, Leif Baecklund, will take control of the assets.

Any decision to sell the properties of the holding company is likely to take account of market conditions – Anglo has said that realising the value of the assets, most of which are located in Russia, could take between 18 months and three years. Some 19 investment sites are affected in Russia, Ukraine, Turkey and India.

While Anglo may have won this battle, they still have to fight what promises to be a lengthy war.

As well as appealing yesterday’s judgment, Quinn is vigorously pursuing a number of legal actions against the bank. Most significantly the Quinn family are taking a legal action against Anglo in Dublin to overturn the Quinn Group receivership. They claim Anglo’s lending to the family was “tainted with illegality” as the loans were provided to prop up its share price during the 2008 crash.

Separately, the bank won a temporary injunction last week preventing the family from moving international assets into what Anglo claims is a newly created “mirror corporate structure” known as the Cranaghan Foundation. The interlocutory injunction application for hearing has been provisionally set for today week, but is likely to be overtaken by yesterday’s case as the assets were to transfered out of Quinn Investments Sweden.

Meanwhile, the Quinns have secured their own temporary injunction preventing Anglo from accessing Russian and Cypriot properties owned by Quinn companies. In Stockholm, Anglo has lodged court proceedings over a move to allot new shares in seven subsidiaries of Quinn Investments Sweden to a a firm called Indian Trust AB, which Anglo says is controlled by members of the Quinn family.

While yesterday’s court decision may have delivered strike one to Anglo, the ensuing war promises to be a protracted one.