IBRC to put up €50m for costs in Quinn case
IRISH Bank Resolution Corporation (IBRC) will "ring-fence" €50m cash to pay the legal costs of members of Sean Quinn's family if the bank loses its action alleging they and others conspired to put assets in their international property group (IPG) beyond its reach, a court has heard.
Lawyers for the Quinns had expressed concerns it was unclear whether the €50m was intended as a fund to meet the legal costs of their case alone or all 840 cases in which IBRC, the former Anglo Irish Bank, is involved. That issue as to what exactly the €50m is intended to cover was also raised last week by Mr Justice Kevin Feeney in relation to another case against IBRC (now in special liquidation).
There are some 120 cases against IBRC while it has taken 720 cases against various parties, including the Quinns.
While the estimated costs of what is referred to as IBRC's "conspiracy" case in Ireland were described yesterday by Mr Justice Peter Kelly as "vastly below" the €50m sum, IBRC has also incurred what are believed to be multi-million Euro costs in litigation overseas aimed at trying to preserve its claim to various IPG assets valued about $700m. The Quinns dispute IBRC has any valid security over those assets.
Minister for Finance Michael Noonan told the Dail last week, "due to commercial confidentiality and sensitivities", the special liquidators of IBRC were unable to disclose the amounts involved and the financial provisions in place for legal cases.
Mr Justice Kelly was yesterday due to hear an application by the Quinns for orders requiring the bank provide security for costs of the "conspiracy" case against them, various companies and others. Michael Howard SC, for three of the defendants - two firms based in the United Arab Emirates, Senat Legal and Senat FZC, and Michael Waechter, principal of Senat FZC - sought a similar order.
Special liquidator Kieran Wallace in an affidavit said €50m would be available towards "the litigation" but also argued the defendants were not entitled to an order for security because they had no bona fide defence to the bank's conspiracy claims.
Martin Hayden SC, for the Quinns, said their concerns about the proposed security included what was meant by "the litigation". They were also concerned, because the special liquidators were subject to the Minister for Finance, about what would happen should IBRC's position change.
Because IBRC's assets were subject to a charge which had been transferred to NAMA by the Central Bank, they were also concerned what that meant about the availability of IBRC assets to others. The case law was unclear in that regard, he said.
Shane Murphy SC, for IBRC, said Mr Wallace had said in an affidavit the assets in the special liquidation will not fall below €50m pending the determination of the Quinn proceedings.
If costs orders were made against the bank and were paid from the €50m fund, that fund would be replenished to ensure €50m would be available at the end of the case. The €50m comprises cash already realised in the liquidation and is a minimum figure, Mr Wallace added. If there was any change in circumstances that might affect his ability to retain the €50m, Mr Wallace said he would notify the defendants should the court consider it appropriate.
After a brief adjournment, Mr Hayden said the sides had come to an agreement involving the application for security being struck out on the basis of what Mr Wallace had said and the Quinns being given notice of any change in IBRC's position. Mr Howard consented to that also.
Mr Justice Kelly said the litigation had "many unusual features" and this was yet another because the liquidator was not defending the security application but was offering to make €50m available for legal costs at the end of the litigation.
The defendants said they had a defence to the bank's conspiracy claims but that as "very much in controversy" from IBRC's side, the judge noted. There was, he believed, little point in the court addressing that aspect when the special liquidator was offering to set aside €50m cash and ring-fence that to be used exclusively to pay any costs that might be awarded to the defendants. If there were other drawdowns on that fund, it was to be kept at €50m which "vastly" exceeded the sides' estimated costs of the litigation.