Quinn children are on the hook for under €400m of Anglo loans
SEAN Quinn's five children are personally on the hook for less than €400m of the €2.8bn their companies owe to Anglo Irish Bank, the Irish Independent has learnt.
The extent of the Quinn children's personal guarantees is revealed in court documents where the Quinns also claim that Anglo bosses asked them to obtain "retrospective" legal advice to belatedly legitimise the guarantees.
The revelations come as Anglo and the family continue to battle it out in courts across Europe about the bank's right to take over the Quinn Group, which was founded by Sean Quinn and jointly owned by his children.
The extent of guarantees is significant in light of recent revelations that Anglo offered to let the children and Mr Quinn's wife Patricia walk away from their debts if they handed over all their assets and adhered to a range of other conditions.
The court documents show that while the Quinn children's companies owe Anglo €2.8bn, the children had each advanced personal guarantees worth just €77m.
The guarantees were given through five Cypriot companies, each of which is wholly owned by one of the Quinn children.
Mr Quinn's wife guaranteed another €102m through a sixth Cypriot company, meaning the six family members could have been personally held liable for under €500m of the Quinn Group's €2.8bn borrowings.
It is understood that Mr Quinn personally guaranteed most of the remainder of the loans -- the proposed settlement offered by the bank to the Quinns included no provision for releasing Mr Quinn from that obligation.
The Quinn family is now contesting the legitimacy of the guarantees and the "share pledges" that turned their shares in the Quinn Group into security for billions of loans used by Mr Quinn to invest in the bank's own shares.
In court filings, the Quinns say they got no independent advice on the share pledges and guarantees and had "no appreciation of the practical meaning or effect of the complex nature of the documentation".
The Quinns also claim that Anglo tried to belatedly legitimise the guarantees by asking the family to obtain "retrospective" legal advice on the guarantees in late 2009.
The family's solicitor wrote to Anglo's legal firm William Fry in January 2010 stating that it would be "inappropriate" for him "to provide independent legal advice relating to transactions that have long since taken place".
Anglo declined to comment yesterday, but the bank is expected to argue that the 2009 request related to copies of contemporaneous independent legal advice the bank believed the Quinns had got when the guarantees were granted.
A spokesman for the Quinns said the family couldn't comment "on foot of legal advice".
The Quinns are also claiming that the share pledges and personal guarantees are "invalid" because they stem from loans that were granted for the illegal purpose of propping up Anglo's own share price.
A court case on the issue is expected to kick off in Dublin early next year.
Separate court cases are going on in Ireland and Cyprus about the Quinn's €500m international property portfolio, which is part of the wider Quinn Group.
The bank claims the Quinns have been removing value from the portfolio in a bid to "denude" Anglo's claim on the assets. A Dublin court has temporarily restrained the Quinns from "interfering with" the portfolio until the case is heard.
The family has also obtained an interim injunction from the courts in Cyprus banning Anglo from interfering with the same assets -- the bank plans to fight this injunction at a court case in Nicosia on Friday.