News Courts

Friday 19 September 2014

Insurers refused to cover FitzPatrick costs

Dearbhail McDonald and Sarah Stack

Published 19/04/2014 | 02:30

  • Share
Not guilty: Seán FitzPatrick outside court following his acquittal
Not guilty: Seán FitzPatrick outside court following his acquittal

Insurers refused to cover the legal costs of former Anglo Irish Bank chairman Sean FitzPatrick, who walked free from court this week facing a legal bill of up to €1m.

  • Share
  • Go To

Mr FitzPatrick, an undischarged bankrupt, did not seek legal aid.

His defence was privately funded after he was refused directors and officers liability (D&O) cover.

D&O cover was also refused to William McAteer – Anglo Irish Bank's former head of risk – who was found guilty by a unanimous jury of providing illegal loans to the so-called Maple 10.

Pat Whelan, Anglo's former head of lending in Ireland, was also convicted of providing illegal loans to the Maple 10 group of borrowers.

Mr Whelan's defence costs were covered by a D&O insurance policy, but he could face civil action to recover the fees in light of his convictions.

None of the three men sought legal aid in advance of their trial, the biggest white-collar trial in the history of the State.

Mr Whelan and Mr McAteer – who were found not guilty of providing illegal loans to businessman Sean Quinn's wife and five adult children – are facing up to a maximum of five years in prison for the Maple 10 convictions.

Mr FitzPatrick, who was found not guilty by the jury of providing unlawful financial assistance to the Maple 10, was acquitted by direction of trial judge Martin Nolan of giving illegal loans to the Quinns due to lack of evidence.

Before it was nationalised in January 2009, Anglo Irish Bank indemnified its directors and other officers "against any liability incurred by him in defending any proceedings, whether civil or criminal, in relation to his acts while acting in office, in which judgment is given in his favour or in which he is acquitted or in connection with which relief is granted to him by the court''.

But the Government changed the terms of its indemnity cover for Anglo directors, now known as IBRC, after it was nationalised in 2009.

The sentence hearing of Mr Whelan and Mr McAteer will take place on April 28 next.

Mr Justice Nolan said he would be unlikely to give a decision that day, but would hear the evidence in the case. There was no objection to Mr McAteer and Mr Whelan remaining on continuing bail until the sentence date.

The Maple 10 deal was designed to unwind the 29.4pc control of the bank which businessman Sean Quinn had built up through investment tools known as Contracts for Difference (CFDs).

The 10 investors were lent a total of €450m by Anglo to buy about 10pc of the shares which Mr Quinn controlled.

Mr Quinn's wife and five children were also lent €169m to buy nearly 15pc of the stock.

Judge Nolan thanked the jury for their verdicts and their service and told them they were a credit to the jury system.

He excused them from further service for 10 years.

The judge also thanked the three jurors who had started the trial before the final 12 were chosen.

Irish Independent

Read More

Editor's Choice

Also in Irish News