Business Irish

Monday 19 March 2018

Sean Quinn to learn whether he is entitled to defend €2.3bn action

Tim Healy

A HIGH Court judge will rule tomorrow whether bankrupt businessman Sean Quinn is entitled to defend a legal action which could result in judgment for more than €2.3bn being entered against him in favour of the former Anglo Irish Bank.

In its defence to proceedings by Mr Quinn's wife, Patricia, and children, arguing they have no liability for some €2.3bn loans made by Anglo, the bank has alleged fraud and conspiracy against Mr Quinn in allegedly obtaining loans from it for an illegal purpose.

Mr Quinn has delivered a full defence denying those claims and alleges Anglo, now the Irish Bank Resolution Corporation (IBRC), at all times knew the real purpose of the loans was to meet margin calls on Contract for Difference (CfD) positions in an unlawful effort to prop up its share price.

Mr Justice Peter Kelly, who last March reserved judgment on the issue of Mr Quinn's entitlement to defend, will rule on that tomorrow.

Anglo contends, as a bankrupt, Mr Quinn is not entitled to defend proceedings in a situation where the court-appointed Official Assignee in Bankruptcy has decided not to defend and where entry of judgment of more than €2bn would not involve "findings" by the court against Mr Quinn.

In the family's proceedings against Anglo, yet to be heard, Mrs Patricia Quinn and her five children contend they are not liable for loans of some €2.34 billion to companies in the Quinn Group on grounds those were allegedly illegally made to prop up the bank's share price.

Anglo denies the claims but has joined Mr Quinn and two former Quinn Group senior executives- Liam McCaffrey, former Quinn Group finance director and Dara O'Reilly, chief executive of Quinn Group (NI) Ltd - as third parties.

The bank contends, if the family wins, it is entitled to be indemnified by the three for the loans on grounds they were allegedly central to the management of the Quinn group and an alleged strategy to make investments to fund CFD positions in Anglo before the end of 2007. All three have denied the claims.

After the Official Assignee told Mr Justice Kelly in February he was not participating in the case, Anglo applied for judgment in default of defence against Mr Quinn, effectively seeking to have him bound by any judgment made at the end of the case.

Mr Quinn asked to be permitted personally defend the claims against him and the judge directed a hearing on that issue.

IBRC contends a bankrupt has no legal or constitutional right to defend in a case where there would be no "finding" by the court on allegations made against them.

While Anglo was also seeking a declaration against Mr Quinn he was a "concurrent wrongdoer", it was not necessary for the court to adjudicate on that before granting any judgment against him, the bank also submitted.

Brian Cregan SC, for Mr Quinn, argued his adjudication as a bankrupt is an economic attribute which does not affect his absolute right as a human being to defend the claims against him.

Where the Official Assignee was not defending, Mr Quinn retained a residual right to defend the case himself, it was argued.

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