Business Irish

Monday 17 December 2018

IBRC secures €121m judgment against businessman Sean Quinn's wife Patricia

Patricia Quinn
Patricia Quinn
Sean Quinn. Photo: PETER MUHLY/AFP/Getty Images

Tim Healy

Irish Bank Resolution Corporation (IBRC) has obtained a €121m judgment against Patricia Quinn, wife of businessman Sean Quinn.

The judgment means Mrs Quinn, who was adjudicated bankrupt in 2011 on the application of IBRC, will no longer be involved in the action by members of her family denying liability for some €1.24 billion loans made by the former Anglo Irish Bank, IBRC's predecessor in title, to various Quinn companies.

Mrs Quinn's five adult children are continuing with that case, initiated in 2011 and due for hearing next March.

The €121m judgment, including interest, was sought arising from a guarantee and indemnity provided by Mrs Quinn in October 2008 guaranteeing repayment of an around €100m facility provided to a Cypriot company, Morboneto Holdings Ltd.

The judgment application, which was not opposed by Mrs Quinn or her Official Assignee in bankruptcy, was granted at the Commercial Court by Mr Justice Robert Haughton. 

Because Mrs Quinn's claim in the family case against IBRC related solely to the Morbonet guarantee, her claim will not now proceed.

Separately this week, Mr Justice Haughton ordered that two men who are alleged to be directors and/or officers of companies based in the United Arab Emirates should be jailed for "serious" contempt if they do not comply within days with certain orders intended to prevent alleged asset stripping from companies of the Quinn family.

The judge also made orders on Wednesday for sequestration of the property of the UAE companies.

The orders were sought by IBRC in the context of its own marathon proceedings against various Quinn family members and companies alleging a conspiracy to place multi-million assets in the family's international property group beyond the bank's reach.

Initiated in 2011, the IBRC case, known as the conspiracy case, will be heard after the family's case.

In the latest pre-trial application in the conspiracy case, IBRC alleged contempt of various court orders by three companies - Mecon FZE, Yangtze Consulting FZC and Senat Legal Consulting FZ LLC - and by two individuals Michael Waechter, a Swiss national believed to be based in the UAE, and Willem Smit, a Dutch national also believed to be based in the UAE, in their alleged capacities as directors and/or officers of some of those companies.

It was alleged both men are officers of Mecon and Senat Legal and that Mr Waechter was also an officer of Yangtze.

There was no appearance by or on behalf of the respondents when the contempt motion was heard.

In an affidavit, Kieran Wallace, special liquidator of IBRC, said the respondents were in contempt over breach of disclosure obligations in orders made by the Irish High Court on dates in 2012 and 2018.

There was deliberate withholding of documents and information that must exist and ought to have been provided, he said.

With the exception of Mr Smit, who is not a party to the main conspiracy case, the respondents seek to ignore the fact the claim against them for conspiracy is for more than €500m, he said.

The alleged asset stripping scheme is "unprecedented in both its complexity and in terms of the loss caused to IBRC".

Mr Wallace also alleged failure to co-operate with Cathal McCarthy, a receiver appointed by the court last February over shares held by Mecon in an Indian company, Mack Soft. 

Mr Justice Haughton found there was serious contempt by the respondents.

In Mecon's case, there was "egregious" contempt concerning its involvement in the bringing of proceedings in India against the receiver, he said.   An Indian district court had set aside injunctions granted ex parte (one side only represented) against the receiver after finding Mecon came to that court with "unclean hands", he noted.

Mecon's actions amounted to an "outrageous attack" on an officer of the Irish court, he said.

He made orders for committal to prison of Mr Smit and Mr Waechter but stayed those to December 4 to allow further time to procure compliance with orders requiring the receiver be formally authorised under the Indian Companies Act as representative of Mecon FZE for taking all acts on behalf of Mecon in respect of the Mack Soft shares.

If there is full compliance, a continuing stay will apply and there will be liberty to apply to lift that, the judge said.

Given the seriousness of the contempt, the judge said he was also making orders for sequestration of the assets of Mecon FZE, Yangtze Consulting LZE and Senat Legal Consulting FZ LLC.

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