Quinn family refused injunctions in IBRC case

Friday 20 December 2013 15.49
The Quinn family has been refused injunctions stopping the IBRC moving assets of the Quinn group to NAMA
The Quinn family has been refused injunctions stopping the IBRC moving assets of the Quinn group to NAMA

The family of bankrupt businessman Seán Quinn have been refused High Court injunctions stopping Irish Bank Resolution Corporation moving assets of the Quinn group to the National Asset Management Agency or otherwise disposing of them by year end.

Refusing the family's bid to "ring-fence" assets pending the hearing of their full action against IBRC, formerly Anglo Irish Bank, Ms Justice Mary Finlay Geoghegan today ruled the Quinns had only established an interest concerning six companies in the Quinn group and went on to find they had failed to establish any value in the shareholdings of those companies.

As the Quinns had failed to show they would suffer loss if the shares in the six companies were transferred or disposed of, they were not entitled to any injunctions restraining that transfer or disposal, she found.

Two of the six companies - Quinn Group (ROI) Ltd and Quinn Quarries Ltd - are in liquidation.

The Quinns had failed to establish any value in the other four companies as of June 2013 last, when the injunction proceedings were initiated, she said.

The four companies are Quinn Finance Holding, Quinn Group Properties Ltd, Quinn Group Hotels Ltd and Slieve Russell Ltd.

The judge also refused injunctions restraining IBRC and special liquidator Kieran Wallace disposing of other Quinn assets or 27 identified properties, including properties located in Ireland and in Russia, India, Ukraine, Turkey and the Czech Republic.

If the Quinns ultimately win their full action challenging the validity of their pledges to Anglo over shares in the six companies as security for €2.34bn loans to Quinn companies, the only property to which they would become entitled by way of relief was the shares in the six named companies, the judge also said.

The family are claiming damages in their full action and intend also to sue the Central Bank and Department of Finance, in their capacity as financial regulators.

Because IBRC is in special liquidation, it appears any damages awarded to the Quinns would have to be paid by the State or realised via a possible unwinding of measures taken by IBRC concerning the six named companies.

In seeking the injunctions, the Quinns claimed they are the rightful owners of the assets and Mr Wallace was not entitled to transfer them to NAMA or sell them by 31 December next as required by the Minister for Finance.

They also indicated, should the orders be refused, they would consider a constitutional challenge to provisions of the IBRC Act allowing the Quinn assets be sold.

Mr Wallace argued the Quinns had no grounds for orders which would "significantly prejudice" the bank and the public interest.

The injunctions application arose as a pre-trial application in proceedings initiated in May 2011 by Mrs Patricia Quinn and her five children challenging the validity of the share pledges given to Anglo, Mr Wallace's appointment as share receiver and certain personal guarantees over loans.

The injunctions were sought due to IBRC being put in special liquidation earlier this year.

The Quinns said their concern was the assets were preserved to meet any award of damages in their full case, the hearing of which remains parked pending the outcome of criminal proceedings against former executives of Anglo.

In her judgment, the judge noted Anglo in 2011 held share pledges over the six companies as security for extensive borrowings of Quinn companies and in April 2011 appointed Mr Wallace receiver over shares in the six companies.

Noting the Quinns did not know the full extent of IBRC's restructuring of the Quinn group and its assets, the judge said a court cannot grant an injunction to restrain disposal of assets when those assets are not defined.

While a list of 27 properties which the Quinns understood were owned by companies within the Quinn group was handed in, those 27 were not owned by, or in the name of, any of the six companies, she said.

In their capacity as shareholders of the six, the Quinns had no entitlement to any property interest in any asset owned either by those companies or any subsidiary of those companies, the judge added.

Because the 27 properties are property assets owned by or in the name of other companies, this meant, even if the Quinns won their main action, they could not obtain a proprietary interest in the 27 properties.

If the Quinns won, the only property to which they would become entitled by way of relief was the shares in the six named companies, she said.