Irish Bank Resolution Corporation [formerly Anglo Irish Bank] to challenge Sean Quinn’s UK bankruptcy application

Interesting development in the continuing complicated legal battle between Sean Quinn, and family, and the artists formerly known as Anglo Irish Bank [now the Irish Bank Resolution Corporation (IBRC)].

On Friday Sean Quinn was declared bankrupt at the High Court in Belfast despite, as the BBC report puts it, “the majority of the 64-year-old’s holdings and debt being from the Irish Republic.”

The application to be declared bankrupt in the UK came just days before a Dublin Court was due to hear an application from IBRC to enforce repayment of €2billion in loans which had been personally guaranteed by Sean Quinn.  From the BBC report on 4 November

RTE’s Prime Time said Anglo went to the High Court in Dublin on Wednesday and lodged documents detailing its decision to call in the guarantees.

It said the loans include one of 1.3bn euros, one of $820m and one of 200m yen all taken by Mr Quinn personally.

They are also calling in personal guarantees by Mr Quinn and his wife for a home improvement loan of 3.5m euros.

As the Irish Times report, on the completion of the sale of Quinn Insurance, notes

The former owner of Quinn Insurance, Seán Quinn, was declared bankrupt at Belfast High Court and his worldwide assets are now under the control of the Official Receiver in Northern Ireland.  [added emphasis]

Solicitors for Mr Quinn, at one time thought to be Ireland’s richest businessman with personal wealth of more than €4 billion, told the court that he had assets of less than £50,000, no income, no property and a pension that would pay less than £10,000 when drawn down.

Mr Quinn and his family owe the State, by way of Anglo Irish Bank loans, up to €2.9 billion, according to the IBRC. Mr Quinn told the court that something more than €2 billion of this was in dispute and was the subject of proceedings in Dublin.

Today Dublin’s Commercial Court has reportedly been told that “Anglo Irish Bank is to apply to annul Sean Quinn’s insolvency proceedings in Northern Ireland.”  From the RTÉ report

Mr Quinn applied to have himself made bankrupt in the High Court in Belfast on Friday.

In his petition to the court in Belfast, which was obtained by lawyers for IBRC this morning, he said he was doing this as the registered office and place of business of the Quinn Group companies was Derrylin in County Fermanagh.

He also said he was domiciled for tax purposes in Northern Ireland and his tax affairs were conducted in the UK.

Senior Counsel Paul Gallagher, for IBRC, said the bank had evidence which contradicted Mr Quinn’s claim that his centre of main interest was in the North.

IBRC claims that Mr Quinn consistently indicated that his home address was Ballyconnell in County Cavan in the annual returns of 95 companies of which he was or is a director. He does not hold any directorships with active UK companies, the court was told.

The bank intends to bring an application by the end of this week or early next week to have the bankruptcy annulled.

An adjournment has been granted until next Monday on the loan guarantees case to allow the Northern Ireland authorities to indicate their position to the Irish Courts.

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  • galloglaigh

    They’ve some cheek!

  • The High Court has the power under Article 256(1)(a) of the Insolvency NI Order to annul a bankruptcy order if
    at any time appears to the Court-

    “that, on any grounds existing at the time the order was made, the order ought not to have been made”

    One reason I can think of why the Bank wish to contest this is on the basis that Mr. Quinn’s Centre of main interest is outside Northern Ireland. A person’s “centre of main interest” is a concept set out in EC Regulation Council No. 1346/2000 which effectively provides that the affairs of a bankrupt shall be dealt with in the jurisdiction where the Bankrupt’s centre of main interest is.

    In Northern Ireland, a bankrupt is discharged after one year. In the republic of Ireland it is 12 years (the law may be about to change down to 5 or 6 years).

    Why are the banks up in arms? This is where Mr. Quinn’s case raises wider issues.

    There are many in the Republic of Ireland who will not be as economically active as they could be because of Ireland’s archaic Insolvency laws. The IMF and other international institutions have been pressurising the Irish Government to heavily cut down the bankruptcy discharge period. However, it is the Irish Banks that have been opposing this measure. They view the freedom, which shorter Bankruptcy would give, as being likely to lead to even bigger losses for the banks.

    A huge proportion of the debt owed to the banks has been caused by Banks’ irresponsible lending. At the beginning of this year, the EU Consumer Credit Directive was issued to curtain irresponsible lending so that consumer borrowers, not fit to borrow, would effectively be protected from themselves.

    Unfortunately, that does not help the many who are bankrupt in the South and effectively in financial penury for many years because of Bank conduct.

    I know that a lot of people are not sympathetic to Mr. Quinn. He has erred on the wrong side of the law. Then again, much worse has been forgiven of high profile people in Northern Ireland. The fact is, he was a successful entrepreneur who built an empire. Northern Ireland could do with more people like Mr. Quinn and for that reason alone, he has my moral support.

  • Alias

    “The fact is, he was a successful entrepreneur who built an empire. Northern Ireland could do with more people like Mr. Quinn and for that reason alone, he has my moral support.”

    Your support is a bit misguided, given that he transferred assets out of his own name for the express purpose of dishonouring personal guarantees and then declared himself bankrupt to aid the same purpose, thereby transferring his obligations onto the taxpayers of the State.

    The State needs more entrepreneurs, certainly, but it doesn’t need any more entrepreneurs who lack moral character and thereby act according to their own interests to the direct detriment of the interests of others.

  • “The fact is, he was a successful entrepreneur ”

    I would consider that highly arguable. His was an empire built on sand.

  • slappymcgroundout

    “given that he transferred assets out of his own name for the express purpose of dishonouring personal guarantees…”

    If he did that, and I don’t know one way or the other, but if we assume that he did, then he is not the only human to blame. His creditors should have periodically checked to see whether his assets were still titled in his name. They might also have structured the credit extension, what have you, as a true secured transaction as to him personally and filed the security instrument with the appropriate govt. agency/body so as to prevent anyone from becoming a bona fide purchaser for value.

  • Mick Fealty

    slappy,

    “His creditors should have periodically checked to see whether his assets were still titled in his name.”

    How so? They did exactly what you said they should have done.

  • drc0610

    Excuse, but how the feck is Mr Quinn and the directors of AIB not in jail by now?

    How exactly did the conversion go?

    SQ “Hi, I’d like to borrow 2Billion Euro please”
    Banker “Oh, that’s quite a lot, what are you going to do with all that?”
    SQ “Well I’ve racked up some massive losses on some fancy financial spread betting type scam and really need the cash to get myself out a hole”
    Banker “Yeah, we’ve been struggling ourselves recently, but we’ll be able to see you right”
    SQ” Great, funny you should say that, it was betting on your shares that go me here in the hoel in the first place”
    SQ+Banker *laughs*

    At least the Americans go after their financial criminals. Strange how no one else has.

  • Alias

    Slappy, this article will give you some sense of the scale of the asset-stripping that Sean Quinn and his family are engaged in, being undertaken for the express purpose of dishonouring his personal guarantee to the state-owned bank and thereby forcing the taxpayers to repay debts that properly belong to Mr Quinn.

    I would like to see him and his entire family along with the professionals who are faciltating this wholesale fraud locked up for a very long period but given that this and the previous government has let it happen on its watch, I wouldn’t bet on that outcome.

    Some of these asset transfers began back in 2002, so this is an individual who was offering guarantees in extreme bad faith. Contrary to how Seymor might see him, this is not a naive 20-something newlywed from Ballybackroads who was pressurised into taking a mortgage that he could not afford. This is a highly sophisicated and expereinced businessman who knew exactly what he was doing and what the risks were – hence his foresight in removing his assets from those to whom he would offer worthless guarantees.

  • Neil

    Interesting link there Alias. So Anglo could have filed for bankruptcy two years ago and avoided this, but chose to rely on a businessman’s honour (when that honour is a straight choice between 12 months of misery or 12 years). What a bunch of wallies.