Quinn family launches action over €2.34bn of illegal loans

The Commercial Court is to fast-track a legal action by the family of bankrupt businessman Sean Quinn against the Central Bank, Minister for Finance and 10 former board members of Anglo Irish Bank. The family is claiming multi-million euro damages over an alleged conspiracy to unlawfully shore up the share price of Anglo.

If the regulator and Mminister were not involved, Anglo could not, and would not, have undertaken €2.34bn loan transactions causing "catastrophic and permanent" damage to the Quinns and the ultimate collapse of the Quinn group, it has been claimed.

The family claim the defendants were aware and approved of the making of some €2.34bn illegal loans to Quinn companies between September 2007 and July 2008 to fund margin calls on financial derivatives known as "Contract for Difference (CFD)" positions in Anglo shares, causing substantial damage to the Quinns' shareholdings.

Judge Peter Kelly yesterday agreed to fast-track the case in the Commercial Court and approved a timetable for exchange of legal documents.

Maurice Collins SC, for the Central Bank, indicated they may apply to strike out certain aspects of the claims.

The judge found no culpable delay in bringing the proceedings, which included circumstances that a stay had been imposed on the separate action by the Quinns against Irish Bank Resolution Corporation over the Anglo loans until criminal proceedings against three former Anglo executives were heard.

In their latest action, the family want declarations that the defendants conspired to commit illegal and/or unlawful acts through breaches of the Companies Act (preventing a company advance loans to buy its own shares) and Market Abuse regulations.

They claim the defendants conspired to procure Anglo to commit the same allegedly illegal acts and that the Anglo directors' authorisation of loan facilities to Quinn Group entities was illegal and/or wrongful.

Damages are claimed for alleged conspiracy, negligence, breach of duty, breach of statutory duty, misfeasance in public office and negligent and/or fraudulent misrepresentation.

The 10 former Anglo directors being sued are Declan Qulligan,Patrick Whelan, Lar Bradshaw, Fintan Drury, Noel Harwerth, Anne Heraty, Michael Jacob, William McAteer, Gerard William McGann and Edmond Francis Sullivan.

Martin Hayden SC, for Mrs Patricia Quinn and her five children, said the application for transfer to the Commercial Court was grounded on an affidavit from Brenda Quinn.

Ms Quinn alleged the regulator and minister knew from, at the latest, September 2007 that Anglo was making loans to Quinn entities to support Anglo's share price.

The defendant directors, she further alleged, sanctioned the alleged illegal share support operation.

The alleged involvement of the board members, regulator and minister would amount to conspiracy to commit unlawful and/or illegal acts involving Anglo, leading to "catastrophic and permanent" damage to the Quinns' valuable shareholding.