ANGLO IRISH Bank is to seek court orders requiring the wife and children of businessman Seán Quinn to provide security for the costs of potential “mammoth” discovery in the family’s action, arguing they have no liability for repayment of €2.3 billion in loans made to various Quinn companies.
The unusual security-for-costs application by the bank will be heard by Mr Justice Peter Kelly at the Commercial Court later this month along with other motions related to the action by Patricia Quinn and her five children – Ciara, Colette, Brenda, Aoife and Seán Quinn jnr – arising from events leading to the family losing control of companies within the Quinn group.
On November 30th, the judge will deal first with the bank’s motion for the court to decide certain preliminary matters in that action.
After ruling on that, he will decide whether or not to grant the bank’s security-for-costs application before ruling on applications by the Quinns and the bank concerning what documents should be discovered.
Earlier yesterday, Brian Murray SC, for Anglo (now Irish Bank Resolution Corporation Ltd), said he would be asking the court to agree to determine preliminary issues in the case and to order Ms Quinn and her children to provide security for the costs of discovery.
When Mr Justice Kelly remarked it was unusual to seek security for costs against individuals resident in the jurisdiction, Mr Murray said the application was confined to discovery costs. The bank previously described the discovery sought as “mammoth”.
In their action, the Quinns insist they have no liability to Anglo arising from guarantees provided over €2.34 billion loans by the bank to various Quinn companies.
They claim the loans are unenforceable because they were issued for the “illegal objective” of supporting the bank’s share price and Anglo was not entitled to appoint Kieran Wallace as receiver over shares in a number of Quinn companies.
They have also claimed they were unaware of the nature or implications of any of the transactions entered into in their names or on their behalf. The family also contend they are entitled to hundreds of millions of euros in damages as a result of alleged negligence and breach of duty through the actions of the bank.
Anglo has denied the claims and last month it also secured orders joining Seán Quinn and two senior executives in the Quinn group – Dara O’Reilly, chief executive of the Quinn Group (NI) Ltd, Tullybuck, Co Cavan, and Liam McCaffrey, formerly the Quinn group finance director, Enniskillen, Co Fermanagh – as third parties to the case.
Anglo insists the loans are enforceable but says that if the family succeeds in their action, the bank is entitled to indemnities from the notice parties against any orders made against it.
It claims the three were central to the management of the entire Quinn group and to an alleged strategy to make investments of some €750 million to fund contract for difference positions in Anglo before the end of 2007.
Anglo also claims the three were actively involved in the funding and security transactions forming the factual matrix of the family’s case. The three made statements which they knew to be false or which were made recklessly, including claims that the Quinn family members were willing and able to provide various share pledges and guarantees, the bank claims.
