COURT REPORT:THE HIGH Court confirmed the appointment of joint administrators to Quinn Insurance yesterday after the company withdrew its objection to the Financial Regulator's move to place it in administration.
At a brief hearing at 2pm, John Hennessy SC, for the Financial Regulator, Matthew Elderfield, told the president of the High Court, Mr Justice Nicholas Kearns, that the company was “no longer opposing” the petition to have Paul McCann and Michael McAteer of Grant Thornton appointed administrators.
The court heard that the role of the administrators is to carry on the company’s affairs as a going concern and to conduct business with a view to putting it on a sound commercial footing.
The court had last month approved the appointment of Mr McCann and Mr McAteer as joint provisional administrators to Quinn Insurance Ltd, Dublin Road, Cavan, which employs 2,800 people.
The regulator said the application arose from his “very serious concerns” about the financial position of the Seán Quinn-founded company, which operates in both Ireland and Britain. Of particular concern was the adequacy of the company’s financial reserves.
Mr Quinn strongly objected to the appointment of the administrators both publicly and in letters to Government Ministers.
The case had been briefly mentioned before Mr Justice Kearns on Monday, when it was adjourned to next Monday for hearing, with an exchange of affidavits to occur in the interim. Yesterday, Mr Hennessy said the situation had changed and the company was accepting the appointment of the joint administrators, who would take over the running of the insurer.
It had been agreed by both parties that orders confirming the appointment of Mr McCann and Mr McAteer as administrators could be made by the court, counsel said.
Michael Cush SC, for Quinn Insurance, said his clients were consenting to the administrators’ appointment. He also asked that the company be put on notice of any future court application by the administrators relating to the company.
While stressing he was neither accepting all the assertions made by the regulator nor rejecting any claims made by the company, Mr Justice Kearns said he was satisfied, on the information before him, to confirm the appointment of Mr McAteer and Mr McCann.
Mr Hennessy agreed with Mr Justice Kearns that the regulator was “very conscious” of the concerns of the company’s employees as a result of the appointment of the administrators.
The judge agreed to a request by Bernard Dunleavy, for the administrators, to put the matter back to May 20th, when a report from the administrators will be put before the court.
Mr Dunleavy said his clients would run the company under the specific powers granted to them by relevant provisions of the Insurance Act and the Companies Act.
If they believed it was necessary to take certain steps, including placing the company into receivership, they would first have to make an application to the High Court.
When seeking to place the company into provisional administration two weeks ago, the regulator claimed the company had “significantly breached” its solvency ratios and its subsidiaries had entered into series of guarantee agreements that had reduced its assets by some €448 million. The company had also failed to deliver a financial plan aimed at restoring its financial health, he added.
The regulator said the application was “urgent” because of concerns about the way the company was conducting its affairs and about its ability to comply with supervisory regulations requiring it to make adequate provisions for its debts, including contingent and prospective liabilities.
In an affidavit, Domhnall Cullinan, an officer within the insurance supervision department of the Financial Regulator, said the manner in which Quinn Insurance was conducting business “was jeopardising and prejudicing the rights and interests of those who have insurance policies with the company”. If it continued like that, there might not be sufficient funds to meet claims under policies, it was claimed.
