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Archive for November 11th, 2011

At the outset it should be said that although Sean Quinn had amassed a vast property empire, reportedly worth €500m, it is not known if he is in NAMA. His property portfolio, which is detailed here, seems to comprise investment, rather than development property, which would exclude him from NAMA’s scope in the normal course of events. Though that said, NAMA did say in the Paddy McKillen court case last year that a key criterion for taking over loans was whether or not borrowers were “systemic”, and with €2.9bn allegedly due to a NAMA bank, Anglo, you could argue that Sean is systemic even if his loans were not for purposes for which NAMA was primarily set up. There has, to the best of my knowledge, been no mention of Sean Quinn being in NAMA in the press or in company accounts. But whether it’s Anglo or NAMA to whom Sean owes money is partly irrelevant, he owns a massive property empire and Anglo, a NAMA bank, claims he owes them €2.9bn.

It was April 14th, 2011 when Anglo appointed Kieran Wallace of KPMG as the company receiver to Sean Quinn’s companies. The receivership was executed with military precision which was hardly surprising given the preponderance of ex-army personnel at the company which organised the logistics on the day, RMI. There’s a description of the day’s events here which saw Sean and the senior management of the Quinn group ousted and replaced by a management team in waiting. Anglo claim that Sean and family and the Quinn group owe it €2.9bn, mostly on the back of Sean’s Anglo share buying spree which saw him end up with control of nearly 15% of Anglo (some reporting suggests 24%), a bank which was to spectacularly fail and is now 100% owned by the State. Whatever about the legal and financial rights and wrongs of Anglo’s blitzkrieg on Sean Quinn’s life on 14th April, it seems to have generated bad personal feelings – subsequent to the receivership Quinn property was sabotaged and the caretaker CEO installed by Anglo was the victim of a arson attack. Sean Quinn himself issued at least one statement to disown these actions, and called on the perpetrators to abandon them.

Yesterday in the blogpost marking John Fleming’s emergence from bankruptcy, it was tongue-in-cheek when it was suggested on here that it’s a pity there isn’t a range of greetings cards dedicated to those seeking bankruptcy, but it might be time to look at such proposed greetings cards more seriously. Sean Quinn is reported to have been declared bankrupt in Belfast’s High Court this morning. There is a statement from Sean Quinn here in which he says he has applied for bankruptcy, which is different to media reports that he has been declared bankrupt. In the statement, Sean concedes he owes Anglo €200m but disputes the €2.8bn sought by Anglo (I think that has now risen to €2.9bn, according to Anglo). He accepts that he shares the blame in arriving in his present predicament – “I worked tirelessly to find a solution to the problems, which arose from the ill-fated investments in Anglo”, perhaps it is nitpicking but I note that he refers to “the ill-fated investments” rather than “my ill-fated investments”. Five of the 13 paragraphs that comprise the statement are given over to attacking Anglo, and its treatment of him, his family and his companies. There is no love lost there at all, and somehow it seems personal. Two of the 13 paragraphs are focused on the media and negative coverage of the Quinn saga. The rest is given over to his feelings at this time, his beginnings in business, subsequent achievements and his thanks to supporters.

So what next for Sean? There’s likely to be one hell of a battle with Anglo who will need evidence the sums owing, so that the very large discrepancy between Anglo’s claimed €2.9bn and Sean’s €200m will need be resolved. There are several legal actions involving Anglo and Sean including some in Dublin’s High Court specifically aimed at clarifying Anglo’s security in the Quinn property empire. On 3rd November, 2011 RTE broadcast a Prime Time special on the Sean Quinn-versus-Anglo conflict, and there appeared to be machinations afoot to put property beyond the reach of Anglo, though it seemed noteworthy to me at least, that a statement from Sean wasn’t provided to give balance to the body of the programme. Somehow, I can’t see this bankruptcy being as smooth as John Fleming’s.

As Sean says in his statement today “there are two sides to every story” I would have said those two sides comprised (1) hard-working, gifted entrepreneur and businessman who created employment and industry in traditionally overlooked parts of the country who became fabulously wealthy on the back of his industry and generates intense loyalty from residents in the Cavan, Leitrim, Fermanagh areas and who built a business dynasty which included his extended family and their spouses and (2) an investor who over-exposed himself to a stake in Anglo Irish Bank, which imploded on the back of a property bubble and financial crisis, and who is now taking steps to mitigate his exposure and protect his, and his family’s, assets as best he can. If it weren’t for the fact that Anglo is now 100% owned by the State so Sean’s debts are owed to the State, it would fascinating to just sit back and watch what is likely to be a titanic battle between Sean and Anglo, which will presumably be played out in Belfast’s courts (though there are still outstanding cases in Dublin). Sadly however, Sean’s gain will be the State’s loss. The only guaranteed winners at this stage are the hordes of lawyers, investigators and accountants who can expect a bonanza in the next 12 months.

Anglo, or IBRC as the Anglo/INBS merged entity is now known, has issued a brief statement which says “IBRC notes Sean Quinn’s application in Belfast for bankruptcy in the United Kingdom. Mr Quinn and his family, who live in Co Cavan, owe the Irish State, through IBRC almost €2.9 billion. The Bank is examining the validity of this application for bankruptcy in the light of Mr Quinn’s residency and extensive business interests and liabilities within the State.  The mandate of IBRC is to recover as much of the debts as possible on behalf of the Irish taxpayer and IBRC will continue to pursue maximum recovery of his debt.”

This bankruptcy will be followed on here with updates to this blogpost.

UPDATE (1): 14th November, 2011. The BBC reports that Anglo (or IBRC as is it new name now that it has merged with INBS) has said that it intends making an application to the High Court in Belfast to “annul” the insolvency proceedings in the UK, claiming that Sean is a resident of the Irish Republic. This came as Anglo and the Quinns engaged in a legal battle in Dublin’s High Court this morning.

UPDATE (2): 14th November, 2011. This is a draft timeline of the life and times of Sean Quinn, it is a work in progress and will be updated.

Sean Quinn timeline

9th September, 1946 (according to company filings) (5th December, 1947 according to wiki)  – Born John Ignatius Quinn in Derrylin, County Fermanagh, Northern Ireland onto a 23-acre farm which was later found to be rich in sand, gravel and shale, the son of a farmer

1962 Left secondary school and worked on the family farm,

1962-1973 The lost years, though Sean did play Gaelic football at county level for Fermanagh, reportedly

1973 Quinn group founded in Derrylin with a GBP 100 loan to build a quarrying business which supplied sand and gravel to farmers and builders around the Fermanagh/Cavan border region; the group’s motto of “Strength through Diversity” was adopted much later;

1974 Sean meets his future wife Patricia at a dance in Galway

1975 Quinn Lite Pac founded in Granard, County Longford to produce polystyrene thermal insulation products for the construction industry

1982 Quinn Rooftiles founded with facility at Gortmullen, Derrylin

1984 Quinn Prestressed founded; the Cat ‘n Cage pub in Drumcondra, Dublin bought with six additional pubs to follow – Messrs Maguire (Burgh Quay, Dublin), Q-Bar (formerly the Harp Bar  O’Connell Street, Dublin),  Quinn’s (Drumcondra, Dublin), the Shamrock Lodge (Finglas, Dublin), and Barge Inn (Charlemont Street beside the canal in Dublin), Quinn’s in Cambridge (UK)

1985 Quinn Packaging founded, with first facility in Newbridge, County Kildare

1989 Quinn Cement founded with a facility at the Quinn quarry in Derrylin, County Fermanagh

1995 Quinn Energy constructs 5 MW windfarm on Slieve Rushen near Derrylin

1996 Quinn Insurance founded with premises on the Dublin Road, Cavan, County Cavan to provide vehicle, household and commercial property insurance

1998 Quinn Glass founded, with first manufacturing facility in Derrylin, followed by a bottling plant built in 2005 in Elton, Cheshire

2000 Quinn Life Insurance founded to provided life assurance cover

2003 Buys a 20% stake in NCB Stockbrokers

2004 Quinn Plastics founded with the acquisition of the Barlo Group PLC.

2004 Quinn Therm founded in Ballyconnell, County Cavan to produce cavity wall insulation products for the construction industry; bought the 788-bed Hilton in Prague and separately the Ibis Karlin, paying €145m for both.

2005 First reported acquisition of shares in Anglo Irish Bank by Sean Quinn; February, the De Vere Belfry hotel and golf course in Birmingham UK is bought for €275m; July, bought 245-bed Hilton in Sofia, Bulgaria; acquires a 10-seater Dassault Falcon 2000 jet

2006 August, bought 232-bed Sheraton in Krakow, Poland;

2007 Quinn Healthcare founded with the acquisition of BUPA’s residual Irish business after that company exited the market ; reportedly paid €150m for BUPA which had 450,000 Irish customers

2007 First reported dabbling in contracts for difference (CFDs) in Anglo Irish Bank by Sean Quinn and said to have ultimately controlled a significant portion of Anglo’s shares (variously put between 15%-24%-almost 30%); February, Sean Quinn is reported to own 5% of Anglo Irish Bank

March 2010 administrators appointed to Quinn Insurance, in which losses of €866m were posted in 2009 and 2010; protest marches in Dublin with a reported 5,000 protesters and Cavan town with 2,500 protesters

April 2011 announcement that Quinn Insurance was being sold to Anglo Irish Bank/Liberty Mutual

April-October 2011 The so-called “de-Quinning” of the Quinn group with various family members departing the group, mostly under difficult circumstances which has led to legal action.

UPDATE (3): 14th November, 2011. The Quinn family dynasty. Reporting of company registration papers filed in Ukraine are said to catalogue an “extended family” corporate structure so the following may just be a partial account, and will be updated.

Sean Quinn aged 63 married to Patricia aged 58, a native of Galway with whom he has five children Seán Quinn junior (aged 32 lives in Castleknock), Colette (aged 36 lives in Cavan), Ciara (35, married November 2007 to Blanchardstown solicitor, Niall McPartland), Aoife (29, married August 2010 to Dubliner, Steven Kenny) and Brenda (aged 24, lives in Castleknock). His brother is Peter Quinn , a chartered accountant who was president of the GAA in the early 1990s and who is credited with commercialising Croke Park and his nephew Peter Quinn junior is “a senior figure” in the international property business.

Lives in seven-bedroom house, said to be owned by the Quinn children, in Ballyconnell in County Cavan just 500m up the road from the Quinn-owned Slieve Russell Hotel. Britain’s Mail on Sunday has an aerial view and internal plans.

UPDATE: 20th December, 2011. As predicted the bankruptcy is turning out to be fascinating, and if it weren’t for the fact that Anglo is pursuing Sean for €2.8bn, equivalent to €650 per man, woman and child in this 4.6m country of ours, then we could probably sit back and watch the entertainment. In the High Court in Belfast, Anglo or “IBRC” as it now known is trying to get the bankruptcy order granted in November 2011 overturned. Anglo is claiming that Sean’s “centre of main interests” is in the Republic and Sean claims it is in Northern Ireland from where according to the BBC, the 64-year old (according to wiki, but it is understood that Sean says that he is in fact 65 having been born 9th September 1946) is drawing a UK pension. What has been fascinating in particular has been the emergence of details of Anglo’s use of surveillance against Sean. Apparently a disused tyre factory in Belturbet, Co Cavan was “observed” by investigators RMI, because Anglo thought it might have been used as a base to launch a new insurance company, named “Q2” which might have rivalled Quinn Insurance. Anglo’s belief followed a posting on a GAA website blog apparently but who posted the claim on the website? Anglo seem keen to stress that it did not have Sean followed, and that the surveillance was limited to observation of the Belturbet premises. It is also claimed that Anglo’s invitation to Sean Quinn extended on the eve of the Quinn receivership in April 2011 was not designed to ensure Sean wasn’t at his premises the next day to obstruct the receivership. The BBC, INM (Belfast Telegraph) and Irish Times and Irish Independent report on today’s proceedings.

 

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