The family of former billionaire Seán Quinn are preparing to challenge the constitutionality of the IBRC Act to prevent the sale of their assets to a third party or the transfer of their loans into the National Asset Management Agency.
The Quinn family and their legal advisers are, according to an informed source, focusing their attention on section 12 of the IBRC Act, which relates to “the sale or transfer of any asset or liability by IBRC”.
The family has asked its legal advisers Whitney Moore and Arthur McLean Solicitors to review this section of the Act with a view to mounting a legal challenge against it in the first quarter of 2014.
Part of section 12 of the IBRC Act refers explicitly to the area of loans made by IBRC that fall under the area of section 60 of the Companies Act, which prevents financial institutions lending to support their own shares.
The IBRC Act states that the “validity and enforceability” of such loans “may not be challenged.”
Constitutional rights
The Quinn family believes that this section of the Act may violate their constitutional rights.
They believe that IBRC, formerly Anglo Irish Bank, lent them hundreds of millions in 2008 in order to support its own share price, a move which was in breach of section 60 and that therefore Minister for Finance Michael Noonan overstepped his powers by including their loans as coming under the IBRC Act.
“If the Government has tried to legislate for something that was illegal, then clearly this has constitutional issues,” an informed source said. “It could well go against the Quinns’ property rights if this was the case.”
The move comes after the High Court refused to grant the family before Christmas an injunction preventing IBRC's special liquidator either alone or with its partner A1, an asset-recovery firm owned by Russian oligarchs, from selling their overseas property empire.
Sale of assets
The Quinn family had hoped to "ring-fence" the sale of their assets which relate to 27 properties until after their full case against IBRC in relation to the legality of their loans was heard.
The High Court heard that IBRC believed its partner A1 had made "substantial progress," in recovering its assets in Russia and the Ukraine, which had been taken over by various mysterious entities.
The Quinns have stated that they no longer control these particular properties.
