The controversy over the sale of Siteserv and IBRC’s role it now looks set to rumble on, with political flak flying about whether the Department of Finance and Minister for Finance Michael Noonan should have done more to probe what happened.
Whatever way this falls, it may well make a deal between the IBRC liquidators and Seán Quinn and his family less likely. In a nervous political environment post-Siteserv, the Government will be slow to give the green light to what would be a controversial arrangement with the Quinns.
Contacts have been going on between the IBRC liquidators, Kieran Wallace and Eamonn Richardson of KPMG, and the Quinn camp in recent months. They have been exploring whether a deal could be reached in which each side would drop the court action in train against the other. The Quinn family is engaged in a multibillion law suit against IBRC and the State over the terms on which it was extended €2.3 billion by Anglo, while the IBRC liquidators are pursuing the Quinns in court to try to get hold of international assets.
The advantage of a settlement to the IBRC would be avoiding uncertainty and the associated legal costs.
However, as the terms of such deals are always confidential, the scope for controversy is obvious, too, as nobody would know precisely what the State and the Quinns were getting out of the deal and on what terms. And remember Seán Quinn and his family borrowed €2.8 billion from Anglo (the court action relates to the bulk of this, but not all of it) and the IBRC has already written most of this off.
The Siteserv controversy looks likely to put the talks on hold and may even scupper the prospect of a deal entirely.
In turn this may lead to the dragging on of the IBRC liquidation, as the liquidators would have to be satisfied that they had enough resources to meet any possible outcome from the legal actions. This could delay the disbursement of at least some of the cash to unsecured creditors, who are due to get money back following the sell off of IBRC assets.
And the bigger unsecured creditor? Well it’s the State, of course, which is owed €1.1 billion on foot of money paid out to guaranteed depositors.
