The Department of Finance is aware that the special liquidators appointed to the Irish Bank Resolution Corporation (IBRC) are discussing the possibility of a deal with the family of former billionaire Seán Quinn, according to informed sources.

Any such deal would have to be approved by Minister for Finance Michael Noonan and possibly the Government, given its sensitivity. No proposal has been put to the department as yet, and it is not clear if any proposal will be.

Earlier this week a knowledgeable source said that any deal was “very unlikely” and “not on the agenda”, but since then sources have said that the possibility of a deal remains.

The deal being discussed would see the family dropping its €4.3 billion claim against the Minister for Finance, the State and the former board of Anglo Irish Bank arising from the seizure by Anglo of the Quinn Group in 2011.

Conspiracy action

In turn, the IBRC, which includes the collapsed Anglo Irish Bank, would drop its conspiracy action against the Quinn family. That case is concerned with steps the family took to put a €500 million international property portfolio beyond the reach of the bank, and with whether the family persisted with the scheme even after being told to stop by the High Court. Among the issues in question is what happened to millions of euro in rental income that remains unaccounted for.

The special liquidators appointed to the IBRC, Kieran Wallace and Eamonn Richardson, are in the process of winding down the State-owned bank and look set to return a €1.1 billion surplus to the State. Just this week, they settled a case against a number of former directors of the Irish Nationwide Building Society.

While it is normal for liquidators to do what they can to maximise the return they can achieve for their creditors, the IBRC liquidators report to the Minister for Finance, as against the courts, which would be more usual.

The liquidators are “obliged to comply with the instructions given by the Minister and act in the interests of the taxpayer under the provisions of the IBRC Act”, according to the department.

Asked yesterday what criteria Mr Noonan would apply when assessing any settlement proposal, a spokesman said: “The liquidation of IBRC is being conducted in full compliance with company law. The legal requirement on the special liquidator is to maximise the proceeds of the liquidation for the best interests of its creditors.”

The Quinn family effort to stop Anglo seizing the international property portfolio involved offshore companies and legal actions around the globe, with a firm in the United Arab Emirates, Senat Legal, co-ordinating court hearings. Senat has denied doing anything illegal.

In 2012, Mr Justice Peter Kelly said that in his years in the court he had dealt with cases of "national and international fraud, sharp practice, chicanery and dishonesty", but that he had never seen anything like the conduct in the Quinn conspiracy case.

He made the remarks when appointing Declan Taite, of financial services group Duff and Phelps, as receiver for the worldwide assets of various Quinn family members and companies based in Belize, Panama, Russia and the United Arab Emirates that were allegedly linked to the asset-stripping scheme.

Mr Taite recently initiated a case in Northern Ireland, in which he is trying to establish the source of funds in a trust there, the Erne Trust, which is funding the Quinns’ legal costs in his dealings with them.

Property portfolio

As a result of the efforts to put the Quinns’ property portfolio beyond reach, properties in Kiev and Moscow, which could have been sold for the benefit of the State, have been allowed to lose value. Sources say the sales process for some assets have been put on hold pending the discussions on a settlement with the Quinns.

The two cases have cost the State millions in legal fees. Meanwhile Seán Quinn, who emerged from bankruptcy in January, is back using his old Quinn Group office in Derrylin, Co Fermanagh.

The group’s former radiator, cement, glass and plastics businesses near the Fermanagh/Cavan border were bought over recent months by Quinn Business Retention Group (QBRC), which is in turn being funded by a group of US bondholders who were owed tens of millions by the former Quinn Group.

They are hoping that the operation will pay off the money owed. Mr Quinn is acting as a “consultant” to the business on a paid basis, according to chairman John McCartin, a local Fine Gael councillor and chairman of QBRC. The operating company for the businesses is called Quinn Industrial Holdings.

Former Quinn Group chief executive Liam McCaffrey is the chief executive of Quinn Industrial Holdings and a number of other long-standing senior Quinn Group executives are working alongside him.

Mr Quinn built up the international property portfolio using borrowings from Anglo and intended that the assets would form part of the inheritance his children would receive from him. Whether he manages to salvage something from that plan may end up being something the Government will decide on.