A HIGH Court judge has granted interim orders freezing assets owned or controlled by the five adult children of bankrupt businessman Seán Quinn, his nephew Peter Darragh Quinn and two sons-in-law – Stephen Kelly and Niall McPartland – below €50 million each except for living expenses of €2,000.
The orders were sought by Irish Bank Resolution Corporation (formerly Anglo) on grounds it believes the Quinns have already “misappropriated” assets from their international property group (IPG) as part of a scheme to frustrate the bank’s efforts to recover loans of up to €2.8 billion against them and they were prepared to dispose of those assets.
The family may have continued to take actions implementing that scheme during High Court contempt proceedings against some of them, on which judgment was reserved last month, the bank claims. Transactions had occurred unexpectedly, without notice, and were ongoing, with one such transaction occurring while the contempt motion was at hearing in May last, it alleged.
Richard Woodhouse of IBRC said in an affidavit it was not possible to put a precise value on the assets removed to date by the Quinns or others acting on their behalf but he believed the value of the assets either removed or at risk of removal amounted to about €400 million.
It had emerged from the contempt proceedings that a firm in the United Arab Emirates, Senat Legal Consultancy FZ LLC, was co-ordinating litigation in all jurisdictions on behalf of the Quinn family, he added. Senat Legal, which specialises in global litigation and its sister company Senat FZC, both based in Dubai, “appeared central to the scheme”.
He said the bank had obtained new information in the past few months demonstrating the extent to which steps have been taken by the family and their agents to appropriate assets in which IBRC has an interest.
This evidence included a distinct pattern of shares in valuable Russian IPG companies being transferred to offshore companies in recent months. In Peter Darragh Quinn’s evidence in the contempt proceedings, he requested purchase of eight offshore shelf companies for the “Quinn family” at the request of the family’s Russian advisers, the law firm AB.
Other information included a Northern Ireland High Court ruling last month setting aside a purported assignment by Mr Quinn of a $45.2 million debt, Mr Woodhouse said.
It was also believed money assets had been taken from IPG companies and a receiver appointed by IBRC over Quinn Investments Sweden, one of the group’s main holding companies, had not obtained any income from any of those companies, he said.
In making the assets restraint orders, Mr Justice Peter Kelly said the allegations against the defendants were of the “utmost seriousness” and, given the “alleged deviousness”, he considered the court should intervene and make the orders sought.
What was most unusual and perhaps unique about the bank’s ex-parte (one side only represented) application was its basis. The bank alleged the defendants were guilty of the most serious behaviour and may have continued to take actions in implementation of the scheme to put assets beyond its reach, even during the contempt proceedings.
After an almost four-hour hearing, Mr Justice Kelly granted the interim orders restraining reduction of assets below €50 million except for living expenses of €2,000 up to Wednesday next. The judge directed that the Quinn defendants could apply to vary the orders at 24 hours’ notice.
He will deal on Monday with the banks application to fast-track to the Commercial Court its proceedings aimed at restraining dissipation of assets within the IPG.
BID FOR APPLICATION RESTRAINT GRANTED
At the request of Paul Gallagher SC, for IBRC, Mr Justice Peter Kelly ordered that the making of the application could not be notified or publicised to any other party until it had finished. A solicitor for the Quinns was in court during the application. Mr Gallagher said the restraint was sought out of concern that if they were aware the application was being made, the defendants might take steps to frustrate its intention.
The judge said he would impose the restriction under the court’s inherent jurisdiction to protect its orders and in the knowledge assets could be transferred now by pressing a button or clicking a mouse.
