Tycoon's real battle with the former Anglo Irish Bank lies ahead, writes Maeve Sheehan

SEAN Quinn provided an intriguing glimpse of life as a fallen tycoon during his failed bankruptcy proceedings in the North's High Court. Once Ireland's richest man, Quinn was "in shock" for weeks after the former Anglo Irish Bank sent in receivers to his Quinn Group last April to recover disputed unpaid loans of €2.3bn.

Quinn obviously thought the receivers would require his help in running the vast empire of concrete, glass and property he had founded. When it was clear they didn't, he "realised he needed an office", somewhere, to "deal with the challenges which would lie ahead", he said in his affidavit.

His office had always been at his Quinn Group's headquarters in Derrylin, the Fermanagh village just across the border from his mansion in Ballyconnell, Co Cavan. "This is the village in which I have run my affairs in the past and will always run my affairs from," he said. Local people came to his aide, he claimed.

"Many of the local population in Derrylin were extremely supportive of my position and offered to help me," he said. Among them was his friend Michael Brady, a businessman who runs a haulage business from a unit in Derrylin Enterprise Park. He offered Quinn office space on the first floor for what the judge called a 'peppercorn' rent of £50 (€39) a month. It was "a gesture of his friendship and loyalty to both me and my family", according to Quinn, and he accepted.

He claimed he set himself up in this modest office on May 2 and worked there "most days". From there, Quinn dealt with his personal mail, domestic affairs and his ongoing litigation with Anglo -- now the Irish Bank Resolution Corporation (IBRC). "I have spent a lot of time studying the proceedings from my office. I have had to give instructions to my solicitors in Dublin and deal with lots of calls and attend consultations," he said.

Many people called in to see him there about their own positions in the Quinn Group. Quinn took an interest in a forestry project in Fermanagh, which needed thinning out. Although owned by Quinn and his wife, they leased the plot to their children. He had several "embryonic" business ideas he wanted to get off the ground but he was reluctant to disclose the details.

The Belfast High Court judge, Mr Justice Donnell Deeny, thought the contrast between this modest office in an industrial estate and Quinn's "former eminence" could be "painful" to Quinn, especially as it was so close to his former headquarters. But Quinn claimed he toiled away quietly for six months from these modest premises, some six miles across the border from his mansion home in Ballyconnell, Co Cavan.

On the surface, at least, it seemed a humbling tale of a billionaire brought to his knees by a hostile bank, while a loyal local community rallied in his support. It was in keeping with his mythical portrayal as the modest tycoon who, despite his riches, remained rooted in his community, still playing poker for a fiver in the same house for 30 years.

But Mr Justice Deeny was not entirely convinced.

Quinn had offered this compelling account by way of advancing his claim that his centre of main interest was in the North which meant he was entitled to go bankrupt there. It would mean that he could start afresh and walk away from his debts in 12 months, as opposed to 12 years in the Republic. IBRC challenged Quinn's bankruptcy, accusing him of bankruptcy tourism and claiming he was really based in the Republic.

In a judgement delivered last Monday, Mr Justice Deeny decided that on the balance of probabilities, the bank was right.

The judge didn't doubt that there was a "considerable residuum of goodwill" towards Quinn in the locality because of all the employment he created. But Quinn hadn't produced evidence of a single letter sent to his office in Derrylin. The judge questioned the curious lease on the office unit, which was likely concocted to bolster his case. His tax letters from the British revenue were posted to his home in Ballyconnell. And Anglo had him "observed" going to and from a disused tyre factory in Belturbet, Co Cavan. He had also failed to disclose other details, such as the fact that 20 per cent of taxes were paid in the Republic.

In all probability, the judge concluded, the former tycoon ran his affairs not from Derrylin but between his home in Ballyconnell, the nearby disused tyre factory and Dublin.

Quinn's bankruptcy status in the North was annulled. And tomorrow the IBRC will start fresh bankruptcy proceedings against Quinn in Dublin's High Court, where bankruptcy lasts for 12 years.

In the long and multi-faceted legal battle arising out of the Quinn family debts, this is the second time in as many months a High Court has found in favour of the bank and against the Quinns.

In Dublin's High Court last month, his wife Patricia was ordered to repay a €3m "home improvement" loan to Anglo after Judge Peter Kelly rejected her claim that she didn't know what she was signing.

Mrs Quinn had claimed she was "unduly influenced" by her husband. Her only financial activity was grocery shopping and paying household bills. Mr Justice Peter Kelly gave this argument short shrift, saying the day was long past when married women could evade liability by arguing they were only concerned with minding their house and children. Not only that but he suggested she was negligent in not knowing what she had signed.

The Quinn children should take note. Along with their mother, they are being sued by IBRC over personal guarantees they signed relating to massive loans to fund their father's gamble on the bank's shares. They are counter-suing IBRC.

Ciara, Colette, Aoife, Brenda and Sean Junior all claim that they didn't know about any of these transactions, had no appreciation of the loan documents they were signing and had never met anyone from Anglo Irish Bank to discuss them, according to the family's statement of claim.

The Quinn family claims the €2.3bn loans to Sean Quinn were illegal because they were used to prop up the bank's share price but were disguised as property loans.

When their father gambled on Anglo's share price, he did so through companies owned by his children. And when he could borrow no more from his own companies to cover his losses, Anglo allegedly loaned the money to prevent Quinn's secret stake from being exposed and the bank price from tumbling.

For Quinn, who last week dismissed the bankruptcy proceedings and the plethora of other legal actions against his family as a "sham" and a "distraction", this is where the meat of the action lies.

The case is due in the High Court next month. But first the Quinn family will have to slug it out with the bank, in a row over access to internal bank documents. The Quinns believe the documents will advance their case; last month IBRC argued that the 900,000 documents sought by the Quinns would cost €1m.

The nationalised Anglo has reason to be concerned about cost. The pursuit of Sean Quinn -- against whom judgements of more than €2.1bn have been registered -- and his family's overseas assets has proved an extraordinarily expensive operation.

When Anglo put the group into receivership, the bank embarked on a global treasure hunt to stake its claim to the foreign properties worth €500m and owned by Patricia Quinn and the children. But its efforts to get its hands on the big prizes -- including a Moscow tower worth $180m (€140m) and a shopping centre in Ukraine worth $60m (€47m) -- have been frustrated at almost every turn. In both cases, mysterious companies have crawled out of the woodwork waving charges over the assets once owned by the Quinns.

These complex manoeuverings have spawned a series of costly litigation that just keeps multiplying. IBRC has accused the Quinns of engaging in a "conspiracy" to put the assets out of reach in a complex web of transfers. The bank has hired lawyers in Russia, Cyprus, Turkey, Sweden, India, Ukraine, the UK, Europe and, most recently, Belize and the British Virgin Islands, trying to unmask the beneficial owners of these mysterious entities.

In advance of the imminent explosive showdown in the Commercial Court, temperatures are rising and hostilities between both sides smoulder menacingly.

Quinn's daughters, Aoife and Ciara, gave a rare two-hour interview to The New York Times last week, accusing the bank of a vendetta against their father. Aoife said: "I know he is no angel and not without blame, but they seem intent to drag him down." Quinn has claimed the bank is trying to "oppress" him by committing him to 12 years of bankruptcy.

Sources at Anglo insist that as far as Quinn goes, tomorrow's bankruptcy proceedings are nothing personal. It's about getting back what's owed -- perhaps the least the bank could do given the €30bn cost to the state of the bailout of Anglo Irish Bank.

In the end though, whoever wins in the battle of Quinn versus Anglo, it won't be Irish taxpayers.

Originally published in