THE Quinn family is considering a constitutional challenge to the liquidation of the former Anglo Irish Bank as it emerged that it has forced the suspension of their long-running legal action against the bank.
The family's lawyers were locked in consultation this weekend to examine all of the legal options, including a constitutional challenge, in advance of a High Court hearing tomorrow.
A source close to the family said that the legislation allows the bank's liquidator to pursue the Quinn family over the disputed loans but forces them to stall their own case against the bank.
The epic legal battle between the family of Ireland's former richest man, Sean Quinn, and Anglo is one of the most acrimonious in legal history.
Anglo – renamed Irish Bank Resolution Corporation (IBRC) – ousted Mr Quinn from his empire to recover €2.8bn in outstanding loans, and is pursuing the family's €500m overseas property portfolio.
The Quinn family is suing Anglo over the legality of the loans they received from the bank.
The Quinns were due to join the Financial Regulator, the Central Bank and the Department of Finance to their proceedings against Anglo in the High Court tomorrow.
But the legislation rushed through last week to expunge the toxic bank has knocked that on the head, as the Quinns' case against the bank is now effectively "dead", according to a source close to the family.
The Minister for Finance, Michael Noonan, has confirmed that the Quinns will have to suspend their legal action.
Mattie McGrath TD asked Mr Noonan to clarify an earlier reassurance that the legislation would not interfere with the constitutional rights of citizens to sue the bank.
"In the course of our discussions, you reassured me that the bill could not interfere with people's rights under the Constitution to take cases," he wrote.
In reply, Mr Noonan said that the special liquidator appointed to the former Anglo will take over the litigation against the Quinns to "prevent dissipation of assets here and abroad" and "will be in a position to bring further proceedings, including contempt proceedings" if merited.
He said the proceedings brought by the Quinns against IBRC will be "stayed as an automatic consequence of the appointment of the receiver".
He continued: "The DPP had, in any event, already issued an application for a stay of those proceedings on the grounds that a hearing might prejudice the criminal prosecutions issued. . . against former officers of IBRC."
A source close to the Quinn family said: "The legislation appears to say that the bank can pursue the Quinns, but the Quinns cannot pursue them. This seems very unfair."
Mr Justice Peter Kelly, who was presiding over the recent cross-examination of the Quinn family by the bank, was expected to give his view of the legislation tomorrow.
Liquidator Kieran Wallace will be represented, as will the Quinn family.