Archive for June 26th, 2012

[The judgment in the case is now available here]

“The behaviour of the respondents outlined in evidence before me is as far as removed from the concept of honour and respectability as it is possible to be.” Ms Justice Elizabeth Dunne concluding the judgment handed down today in the Anglo v Quinn contempt case.

The continuing Quinn family saga took a dramatic turn this morning when Dublin’s High Court ruled that members of the family were in contempt of orders made by the court last year, orders aimed at preserving assets that IBRC wants to use to offset €2.8bn of loans given by the bank. The Quinns – Sean (senior, the formerly richest man in Ireland), Sean (junior) and Sean senior’s nephew, Peter Darragh (otherwise, Peter Darragh Quinn) – are each held to have breached orders made by the court in 2011.

The judgment handed down this morning by Ms Justice Elizabeth Dunne is here. It follows a long line of judgments in Dublin and Belfast. And Kiev, in the Ukraine where IBRC has so far failed to get its hands on a €50m shopping centre. The BBC undertook a special investigation – which was broadcast last month – into the global machinations involving the Quinn property empire. The BBC’s Jim Fitzpatrick pursued a trail of asset transfers which took him from Derrylin to Stockholm to Kiev to Moscow to Belize City – below is a screengrab from the programme with Jim pointing, in an anonymous post office hallway in Belize City, to the registered office of a company laying claim to a €100m Moscow office block. You will find two of the previous court judgments and commentary here and here.

The judgment this morning is damning of the three Quinns. There are findings that documents were fabricated and back-dated, that the Quinns were not truthful in giving evidence and that, contrary to the orders obtained by IBRC last year, they deliberately sought to put assets beyond the reach of IBRC. It is believed it will be some days before the Judge decides on the penalties to apply – IBRC sought “committal or attachment”, meaning prison or financial penalties. Sean Quinn Senior is a bankrupt.

IBRC’s CEO Mike Aynsley said this morning in response to the judgment “Bringing this contempt motion was a valid and necessary step for IBRC to take. The proven planned, covert and illicit actions taken by the Quinns and connected parties have resulted in millions of Euros being lost or put at risk. IBRC will continue to seek to remedy this and recover as much of the remaining assets as possible on behalf of the Irish taxpayer.”

Larissa Puga (above, left) employment contract judged to have been altered so as to provide for a USD 500,000 termination payment.


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There’s always one, and in this case, his name is Johnny Moran.

This is not news and the basic facts of the case were reported in the Irish Times last month, but the judgment in the case has only now been published, and it makes for interesting reading. It concerns a borrower at IBRC who is aggrieved that his loans weren’t transferred to NAMA.

Johnny Moran, the businessman behind the Holiday Inn Hotel in Pearse Street, a restaurant in Temple Bar, Tante Zoe’s restaurant, the Blarney Inn Hotel, Kildare Street along with an associated nightclub called Club Nassau, all in Dublin, seems to believe that if his loans had been transferred to NAMA, he would have benefited, but instead he continues to have to deal with pesky IBRC which has taken enforcement action against him in a separate case, which promises to be a good old mudslinging contest with allegations of “breach of statutory duty, breach of regulations, dishonesty, impropriety and fraud”

Johnny sued IBRC saying his loans should have been transferred to NAMA where, he claims, he would have enjoyed the following benefits

(1) “NAMA requires each borrower to submit a business plan whose primary purpose is to present a complete account of its financial affairs and to provide a detailed plan of how and when all liabilities to NAMA will be repaid. It is to be noted that the liability to NAMA is represented by the discounted price paid by NAMA for the original loan” So NAMA acquired loans from the banks with an average 58% discount or haircut, or to put it another way, NAMA paid 42c in the euro on average for the loans it acquired. Johnny thinks that he would have seen a debt write-down in NAMA.

(2) “credit activity continues whilst this process of engagement with borrowers is under way. NAMA has provided significant credit to borrowers”

(3) “were their loans to have been transferred to NAMA that NAMA would have accepted a business plan and would not have proceeded to enforcement”

(4) That NAMA has a comprehensive system for reviewing developer business plans which includes independent reviews and reviews by the “NAMA board, credit committee, chief executive or senior management, based on a cascading system of delegated authorities approved by the board.”

Of course NAMA might say in response to (1) above – as it has frequently in the past – that the full amount of the loan remains payable, though as we are beginning to see, NAMA is “restructuring” loans and developers are being allowed walk away from personal guarantees and personal recourse.

In summary, the judge in the case was having none of it, and decided a specific developer did not have a right to have his loans acquired by NAMA, and in any event, the full amount of the loan would remain payable and there is no evidence to show that NAMA would not have taken enforcement action in a way that was different to the approach of the IBRC.

NAMA has in the past had to contend with developers like Paddy McKillen – when did we stop referring to Paddy as a property “investor”? – who have done their damnedest to stay out of NAMA. It is novel to see a lone developer fighting to get in, though it would appear from the judgment that he might have had unrealistic expectations of life in NAMA.

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