Belfast Court rules against Quinn transfer of $45m debt
A $45m (€34m) property debt was transferred from one of bankrupt businessman Sean Quinn's companies to put it beyond the reach of a creditor bank, the Belfast High Court judge ruled yesterday.
Mr Justice McCloskey held that those responsible for the loan assignment over a Ukrainian shopping centre were "indulging in an orchestrated, elaborate and illicit charade".
He is now set to declare all disputed transactions null and void and return control to the former Anglo Irish Bank.
His ruling strengthens the overall attempt by the renamed Irish Bank Resolution Corporation (IBRC) to recoup more than £2bn it claims to be owed.
Proceedings were issued against the British Virgin Islands-registered Lyndhurst Development Trading in order to seize control of the shopping centre in Kiev.
IBRC claimed assets were stripped to prevent it from securing money owed to the bank.
A chain of loan assignments were under scrutiny in the case.
Fermanagh-based firm Demesne Investments, of which Mr Quinn is a former director, had been owed $45m by Univermag, the Ukrainian owners of the shopping centre.
But in April 2011 Demesne transferred its rights to the debt to Innishmore Consultancy, another Northern firm run by Mr Quinn's nephew Peter Quinn.
From there the loan was transferred on to Lyndhurst last October.
Lawyers for IBRC argued that the assignment was a sham, carried out at a massive undervalue and not worth the paper it was written on.
No defence was offered in the case after Lyndhurst's legal team came off record.
Delivering judgment yesterday, Mr Justice McCloskey said: "The abrupt, unexplained and prima facie irrational assignment of a company asset, the $45m debt of which Demesne was the beneficiary, for nothing, or at most something truly minimal, speaks for itself.
"When considered in conjunction with the other related impugned transactions, it is patent that the participants were indulging in an orchestrated, elaborate and illicit charade."
He added: "Based on the available evidence, this exercise had no purpose other than to put this asset beyond the reach of legitimate creditors and/or to prejudice their interests."
According to his assessment the bank was the victim of the assignments and eligible for an appropriate remedy.
An order is expected to be drawn up next week which will declare all of the disputed transactions null and void.
Demesne is set to be confirmed as solely entitled to the debts, thus putting them back within the reach of the bank.