A STG100 million debt assignment by a company formerly run by bankrupt tycoon Sean Quinn "smacks irresistibly of an orchestrated, elaborate and illicit charade", a High Court judge in Belfast ruled today.
Mr Justice McCloskey held that the transfer to a Belize-registered company had no purpose other than to put the assets beyond the reach of legitimate creditors.
He declared the transactions unlawful, null and void.
The judge, sitting in Belfast, found that a date on all of the 29 assignments was "plainly fabricated" and unlawfully backdated.
Even if wrong in his main decision, he said the transfers were still invalidated on the ground that Mr Quinn therefore acted "in blatant disregard of his fiduciary duty."
His verdict came in a challenge by the Irish Bank Resolution Corporation over a series of dealings connected with an eastern European property empire linked to the ex-billionaire.
IBRC wants to seize the Kutuzoff Tower in Moscow as part of its bid to recover more than STG2bn it claims to be owed by Mr Quinn.
Proceedings centred on a series of debt assignments from the Fermanagh-based Demesne Investments Ltd, of which Mr Quinn is a former director.
The transfers, allegedly dated 4 April, 2011, meant the right to STG100m worth of debts from a series of Russian companies would pass to Galfis Overseas Ltd in Belize.
Assignments were made in return for $100 in each case.
They were signed by Mr Quinn and his nephew Peter Quinn as a director or representative of the Russian firms, interest rates on the original loan agreements was increased to 30%, the court heard.
Counsel for IBRC, instructed by the Belfast law firm Tughans, argued there was overwhelming and undisputed evidence that the switch could not have taken place before July 2011 - by which time Sean Quinn had lost control of his businesses.
It was claimed that the purpose of the transaction was to take the property out of the bank's reach.
Mr Justice McCloskey agreed with this assessment today, pointing out that Galfis was a dormant, unincorporated shelf company until 6 July, 2011.
He said: "There is no discernable reason why Demesne would have divested itself of assets worth approximately STG100m on the date of 4 April, 2011.
"Equally, there is no ascertainable reason to explain why Demesne would have divested itself of these assets for a total financial consideration of the order of STG5,000.
"There is nothing which can rationally account for the apparent willingness of Demesne's Russian creditors, who owed the company STG100m, to suddenly and collectively commit themselves to the penal interest repayment rate of 30%"
He ruled that all of the transactions have no effect because they were carried out without the authority of the creditor, Demesne.
The judge confirmed that the plaintiffs' primary case was proven, but further found for them on their alternative grounds advanced.
He added: "The abrupt, unexplained and prima facie irrational assignment of company assets - debts - having a value of around STG100m for a total consideration of less than STG5,000 speaks for itself.
"It smacks irresistibly of an orchestrated, elaborate and illicit charade.
"On the basis of the available evidence, this exercise had no purpose other than to put the assets in question beyond the reach of legitimate creditors and/or to prejudice the interests of such creditors."
