The family of bankrupt businessman Sean Quinn has hinted at a possible legal challenge to the statutory stay in the IBRC Act, which has halted all existing proceedings against the former Anglo Irish Bank.
The Quinns action alleging that Anglo unlawfully “shovelled” €2.34bn loans into their companies to prop up its plummeting share price remains parked by the new law.
If the commercial court rules that the act liquidating IBRC does not allow for the stay to be lifted, the Quinns will reserve their position on any steps to be taken later, their counsel Ross Aylward said yesterday.
Mr Justice Peter Kelly said he was faced with a “conundrum” as there was an issue whether the act gave any power to the courts to lift what the act describes as an “immediate stay” on all “existing proceedings” against IBRC. There was also an issue whether he could even permit such an application to be brought.
The wording of the act appeared very clear in that it provided for a stay on existing proceedings with no entitlement for the courts to lift those stays as the act disapplied provisions normally allow for lifting stays, he remarked.
While the reference to all proceedings might not be as stark as it appeared, the exact meaning of the relevant provisions should be thrashed out fully in a hearing on Mar 7, he said.
The Quinn action is the first main piece of litigation where the issue arose but the outcome of the March hearing will affect many other existing proceedings against IBRC which appear captured by the stay, the judge said. The stay applied only to “existing” proceedings against IBRC and did not prevent the bringing of new actions, he added.
The action by Patricia Quinn and her five children against IBRC was initiated in 2011. They claim they are not liable for €2.34bn loans made to Quinn companies on grounds that those loans breached the Companies Act and market abuse regulations.
While the full hearing of the case has been parked pending criminal proceedings against former Anglo chairman Sean FitzPatrick and others, various pre-trial matters were continuing until the IBRC act was passed last week.
The family’s lawyers were due to tell the judge yesterday whether they intended to proceed with an application to join the Department of Finance and Central Bank — as regulator of the banks — as co-defendants with IBRC.
In court yesterday, Paul Gallagher SC said he was representing IBRC in the matter and was instructed by the special liquidators of the bank.
When Mr Justice Kelly expressed concern whether the court could even permit the Quinns to bring an application to lift the stay, Mr Gallagher said he would not object to the application being made but had no instructions at this stage on whether the court could lift the stay.
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