Policyholders will foot bill if Quinn family's legal actions are successful
Published 26/08/2011 | 05:00
INSURANCE policyholders across Ireland will end up footing the bill if members of the Quinn family are successful in their legal actions against Quinn Insurance Limited (QIL).
The situation is revealed in documents lodged with the High Court detailing the terms of QIL's imminent sale to Anglo Irish Bank and US insurer Liberty Mutual.
The filings show that the way the sale is structured exempts the new owners from a wide variety of future potential costs, including actions by former employees.
Three of Sean Quinn's children -- Ciara, Sean Jnr and Brenda -- have either begun legal actions or indicated plans to file suit over the way they were treated by the insurance company their father founded.
The cost of those actions, if successful, would typically be borne by the assets of the QIL business not being bought by Anglo/Liberty.
But since the claims being left behind already outstrip assets by some €600m, the cost of future legal actions will ultimately be funded by an insurance levy to be raised from Irish policyholders.
Other QIL liabilities that don't transfer to the new owners are any grants that Enterprise Ireland, Invest Northern Ireland and the Northwest Development Agency of England try to recover. It is understood that these amounts are not material.
Liberty and Anglo are also exempt from liability for any legal actions launched by policyholders relating to the time before the sale goes through.
The documents are expected to be published on QIL's website over the coming days, as the sale reaches its final phase ahead of completion on October 4.
The deal is contingent on formal written approval from the Central Bank of Ireland and the European Commission -- this is expected to be delivered over the coming weeks. Liberty will take the lead role in running the business, and is expected to name a chief executive, most likely from the existing Liberty team, in the coming weeks.