The fallout from Sean Quinn’s fall from grace continues. Mr Quinn’s five children, Colette, Ciara, Sean Jr., Aoife, and Brenda currently face proceedings in the High Court against Irish Bank Resolution Corporation (“IBRC”) and its liquidator. The case turns on personal guarantees and share pledges which the children gave towards multi-million loans offered by Anglo-Irish Bank.
The proceedings arose out of Sean Quinn Sr.’s original use of a contract for differences with Anglo-Irish Bank. These financial instruments allowed Mr Quinn the chance to bet on shares without owning them. However, following the collapse of Anglo’s share price, Quinn and others withdrew vast sums of money from his collection of businesses, Quinn Group, to cover up the losses and save Anglo’s share price. This failed however and Mr Quinn was declared bankrupt in 2012. The CFDs, totalling €498 million, were transferred to six Quinn-owned companies based in Cyprus. Mr Quinn’s children were shareholders in the Quinn Group and signed guarantees for these CFDs, making themselves liable for up to €415 million.
Paul Gallagher SC, counsel for IBRC, claims the children were well aware of the nature of these transactions and used the Quinn Group as their personal bank, financing their personal expenses with the Group’s money. One alleged example included Ciara Quinn’s €1 million wedding bill. Mr Gallagher also argued that the children engaged in a complex and sophisticated financial transaction. This involved moving some of the Quinn Group’s international assets in order to take €2.3 billion worth off the table. Mr Gallagher capped this opening statement by saying that the children’s act of disputing the liability was ‘unconscionable’ and ‘beggars belief’.
The Quinn Children in response have alleged undue influence. They state that the bank took advantage of their inexperience and relationship with their father. Though this was not the original direction of the case, Bernard Dunleavy SC, counsel for the Quinns, has asked the presiding judge for permission to amend the case. Mr Dunleavy stated that the way the children grew up led them to defer to their father in most decisions and would have had enjoyed such a trusting relationship as to not consider seeking legal advice.
Both counsel for the liquidator and IBRC strongly contest the children’s attempts to amend their claim. Paul Gallagher states that there is evidence the strongly knew of the nature of the contracts they were signing. The children had known about their father’s supposed undue influence for several years and had never come forward to support him as a witness. Brian Murray SC added that altering the claim would place too much of an onus on the INRC. Justice Garrett Simons shall rule on the Quinn Children’s claim on Wednesday, 27th March. In a case harrowed by several complications, the ruling may bring some clarity towards the proceedings. Or it could further exacerbate the effects of Sean Quinn’s sins.
By Daniel Forde – Law Editor