Quinn family settle bank dispute in €440m judgment
A dispute between the five adult children of former billionaire Sean Quinn and the Irish Bank Resolution Corporation (IBRC) has been settled after they consented to having judgements totalling €440m entered against them.
The High Court in Dublin was told on Tuesday morning by Bernard Dunleavy SC, counsel for the Quinn children, that the children's proceedings against the former Anglo Irish Bank could be struck out.
He said the court did not have to make an order on costs.
However, the court also heard from IBRC’s counsel Paul Gallagher SC that judgments in the sum of €88,157,351 could be entered against each of the children in favour of the bank.
He said there would be a stay on the execution of these judgments “on terms agreed by the parties”.
The agreement was reached on Monday night following over a week of talks between both sides.
Mr Dunleavy said the outcome of the talks was that “all of the proceedings have been resolved”.
In their action, the children had claimed loan guarantees and share pledges given in connection with €2.34bn in loans from Anglo to Quinn Group companies in 2007 and 2008 were invalid.
IBRC had a counterclaim seeking to recover €82m from each of the children.
In a separate case, the IBRC alleged the children were involved in a conspiracy to strip €455m in assets from their international property group. This action will now not go ahead.
Under the terms of the agreement, the Quinn children have committed to giving “full disclosure” in relation to the Quinn assets allegedly put beyond the reach of the IBRC.
Mr Justice Garrett Simons congratulated both sides on reaching an agreement. He said this was a “very sensible” outcome.
None of the Quinn children, Sean Jr, Colette, Ciara, Aoife or Brenda, were in court on Friday morning.
While IBRC is not seeking a costs order against the Quinns, it is seeking costs from two “third parties” in the case, former Quinn group executives who had been due to give evidence had the trial continued.
The court will deal with this matter at a later date.
The agreement comes just days after the Quinns suffered a significant setback in the case when Mr Justice Simons ruled they could not amend their statement of claim to include an allegation they were under the undue influence of their father when they signed loan guarantees and share pledges.
The judge also refused to allow them to file supplementary witness statements.
The loans the children signed off on were predominantly used to cover losses made by their father following his disastrous speculation on Anglo shares using complicated financial instruments known as contracts for difference.
The stock market bets would ultimately lead to the downfall of the Quinn Group and Mr Quinn’s bankruptcy.
The children were the shareholders in the group and their signatures were required for the loans to go through.
They claimed loan guarantees and share pledges they gave in connection with the borrowings were invalid on a number of grounds, including the alleged undue influence of their father and "unconscionable bargain" - that the guarantees they were asked to sign were unfair and contrary to common sense or good conscience.
They had also alleged negligence and breach of duty by Anglo, especially to advise them of the risks they faced.
Had they known the risks, they would not have signed the guarantees, they claimed.
The children also alleged that "signature switching" took place. This was an allegation that having signed an earlier draft of a share charge, the signature page was then wrongfully appended to a later revised draft by persons in Quinn Group. This allegation was only being made in relation to some of the transactions they claimed were invalid.
The case was first initiated in 2011 and had been due to run for six months. But after opening statements lasting five days, the parties decided to enter talks.
In a statement, the IBRC said: “An agreement has been reached following discussions over the last number of days.
“Pursuant to the agreement, the Quinn family has agreed to the dismissal of all of their claims against IBRC, as well as their separate claims against the Central Bank and various other parties.”
The statement said the Quinn family had provided IBRC with “full disclosure” and would likewise relinquish any entitlement to any assets which IBRC has a claim to.
It said the Quinns acknowledged IBRC had “valid and enforceable claims” on such assets.
The statement said final orders, including orders for judgments against the Quinn children, would be obtained in the separate proceedings taken by IBRC against the Quinn family.
This was a reference to the conspiracy proceedings. The final orders in that case are expected to be sought tomorrow.
The statement continued: “IBRC views this settlement as being in the best interests of creditors, in circumstances where it has received full disclosure from the Quinn family and where the very lengthy litigation that has been in being since 2011 will be brought to a conclusion.”