The High Court has ruled that the administrators of Quinn Insurance are to be paid €738m from the Insurance Compensation Fund.
The pay out is subject to the Court giving its approval to the sale of the business to US insurance company Liberty Mutual.
Lawyers for the administrators asked the High Court President, Mr Justice Nicholas Kearns, to allow them to draw down €320m immediately to enable the transfer of the group to Liberty Mutual. He approved the draw down of a further €418m subject to further applications to the court.
Senior Counsel Denis McDonald said the administrators were conscious that €738m was a very significant imposition on taxpayers. But he said the payment was necessary to allow policy holders transferring to Liberty to be protected and to allow remaining policy holders and the employees to be protected also.
He said Quinn Insurance currently had a deficit of €851.5m while operating as a going concern. If the business were to be liquidated, he said, the total cost to the tax payer could be €500-600m more.
Mr Justice Kearns approved the payment after lawyers for the Minister for Finance said they were consenting to it. He said he was very conscious of implications for taxpayers but the sum of €738m had to be balanced against a possible pay out of €1,300m if the business went into liquidation.
Tomorrow the High Court president will hear an application by the administrators of the Quinn Insurance group to transfer the business to Liberty Mutual.
Two groups signalled today that they would be opposing the transfer. Lawyers for Concerned Irish Business and for Concerned Irish Citizens said they represented policyholders and employees of Quinn Insurance. They said they were seeking a copy of the asset transfer agreement.
Lawyers for the administrators say this is a commercially sensitive document which if leaked, could destabilise the whole transfer of the business.
Mr Justice Kearns said he would hear the arguments tomorrow and asked lawyers for all sides to try to narrow down the grounds of objection to the transfer. He said he fully understood that they had genuine concerns.
