The Commercial Court has heard about the background to a claim by Sean Quinn's wife and five children that the former Anglo Irish Bank lent them more than €2bn for the illegal purpose of propping up its own share price.

The court has to decide whether or not Patricia Quinn and the five adult children have the legal standing to argue that the bank breached Market Abuse Regulations and company legislation.

Senior Counsel Brian O'Moore outlined how in 2007 Sean Quinn senior began to invest in Contract for Difference positions in Anglo Irish Bank shares.

This built up until a company incorporated to conduct these investments - Bazzely Limited - had an interest of around a quarter of Anglo's entire issued share capital.

Mr O'Moore said Mrs Quinn and the five Quinn children were not aware that this was being done.

He said David Drumm and Sean Fitzpatrick became aware of the Quinns' interest in the bank at a meeting on 11 September 2007 at a hotel in Navan, Co Meath.

He said within days of that meeting a system was set up where there would be regular contact between Anglo executives and Quinn executives about the CFD position.

The Anglo share price continued, in general, to decline during this period, the court heard. Therefore, the Quinn companies had to keep paying out money to sustain their CFD position.

The Quinns say the bank was aware of this and was afraid that the consequences for the bank would be "catastrophic" if the Quinns tried to get rid of their interest.

They say the bank then advanced huge sums of money to them in order to maintain the Quinns' CFD positions and the share price of the bank.

Lawyers for the Quinns say Anglo advanced millions of euro to Quinn companies, knowing that the money would be used to pay "margin calls" on the CFD positions.

These funds were described in some cases as funds for property acquisitions.

The Quinns say the bank took illegal actions on a persistent and ongoing basis.

Discussions about share price

Lawyers for the Quinns say there were discussions in December 2007 between Sean Quinn senior and Mr Drumm about a fall in the Anglo share price and difficulties faced by the Quinn Group.

The court heard that Mr Quinn indicated that they would need €400m to pay money back to Quinn companies that had been used to pay for the CFDs.

The court heard Mr Drumm was told by Mr Quinn that this would ensure that the annual accounts would not draw attention to the fact that these CFD positions were held by Mr Quinn.

The court heard that Mr Drumm offered Mr Quinn €500m and said the extra €100m could be used to "tidy up matters".

Mr O'Moore said the bank was fully aware of what the money was being used for.

The €500m loan was then given in the entirely false guise, the court was told of "gearing up the property portfolio of the Quinn Finance group".

During 2008, the court heard, the Anglo share price did not stabilise and Bazzely faced frequent "margin calls".

The Quinns claim Anglo effectively controlled and managed the CFDs.

They say Anglo "ran the show" because it was "paying for the show" and "keeping the show on the road".

'Unforgettable developments' in March 2008

The court was told that during four days in March 2008 there were "unforgettable developments".

The Anglo share price dropped by almost €2 between 14-17 March.

The court heard enormous amounts of money flowed between the bank and Quinn companies.

Around €350m was made available by the bank between 14 March and 19 March to pay money owing on the CFDs because of the drop in the share price.

Because one tranche of money had to be paid on 17 March, which was a bank holiday in Ireland, money had to be drawn down from an Anglo branch in the UK and made available to a Quinn company in the UK.

Lawyers for the Quinns said this showed the bank's "wild willingness" to meet the margin calls to maintain its share price.

Mr O'Moore said nobody in Anglo appeared to have stood back and said why are we shovelling all this money into our own share price.

He said the scale of the payments, their purpose and the knowledge that all this was going on makes it an egregious and deliberate breach of Market Abuse Regulations and company legislation.

In early march and late April 2008, Quinn's Northern Ireland company was coming under pressure from bondholders and other financial institutions to repay loans.

There was a fear that the Quinn interest in Anglo would be revealed, the court heard.

Anglo advanced €200m to Quinn Finance to prevent this from happening.

But a precondition of this loan was that the Quinn children had to provide share pledges in relation to their shareholding in the Quinn holding company based in the Republic.