Court appoints bankruptcy receiver to Quinn company
Family vows to overturn Swedish judge's ruling on QIS
Published 06/07/2011 | 05:00
A SWEDISH court yesterday agreed to appoint a bankruptcy receiver to the company that controls the Quinn family's vast international property empire -- prompting the Quinns to immediately vow to appeal the decision.
The receiver's appointment came on foot of a petition from Anglo Irish Bank, which told the courts Quinn Investment Sweden (QIS) was insolvent and unable to pay a €2.3bn debt called in by the nationalised bank.
The Quinn family had fought the move, arguing that QIS owed Anglo the much smaller sum of €129m and should not be forced to liquidate its €500m property portfolio.
A judgment handed down in Stockholm yesterday afternoon confirmed that a bankruptcy receiver would be appointed, though the court also acknowledged that QIS only directly owed Anglo €129m.
Anglo's lawyers say QIS is liable for the €2.3bn because the company has given guarantees for amounts owed by its subsidiaries, which stretch across Cyprus, Russia and the Ukraine.
Sources last night described the QIS bankruptcy move as "significant" but stressed that there was a "very long way to go" in entangling the international property rows between Anglo and the Quinns.
The Quinns are already preparing to mount a legal challenge to have the Stockholm verdict overturned and the bankruptcy receiver removed.
Even if the bankruptcy receiver stands, extracting value from QIS for Anglo and other creditors is likely to be a protracted affair. While properties under QIS are believed to be worth more than €500m, the assets involved are owned by QIS's complex network of subsidiaries rather than by QIS directly.
Anglo has told the Irish courts there is a real risk some of those properties will be taken out of the QIS structure before Anglo can get value from them and has secured a temporary injunction effectively freezing the assets.
Anglo is preparing to begin a hearing for that Irish case next Wednesday -- despite yesterday's move. The international property empire is also the subject of legal actions in Cyprus, Moscow, and the Ukraine.
The international property row comes as Anglo battles to enforce the security it was granted by the Quinns for loans totalling €2.9bn, which were largely used to fund Sean Quinn's disastrous punt on shares in Anglo itself.
Mr Quinn's family is pursuing a legal action against the bank's enforcement of those loans, arguing the loans were granted for the illegal purpose of supporting Anglo's own share price.
That hearing, which extends to the bank's seizure of the Quinn Group as well as the property empire, has been listed for January in the Four Courts.