Chasing down the mighty Quinn
ON Monday, the bank formerly known as Anglo Irish will apply to bankrupt the businessman who was formerly Ireland’s richest person.
Both entities blazed a trail through Ireland during the Celtic Tiger bubble. Both flew too close to the sun, and came crashing to earth. One of them has now changed its name. The other was once referred to as The Mighty Quinn, after the song written by Bob Dylan. It is a moniker seldom heard nowadays.
The Irish Bank Resolution Corporation (IBRC) is moving through the High Court to take control of the finances of Sean Quinn, who owes the bank nearly €3 billion.
The move marks a nadir in the career of the one-time billionaire.
Quinn built his empire from scratch, more often than not entering monopolised markets and using acumen and determination to take a slice of the action from the big boys. Then he gambled the shop on the share price of Anglo Irish Bank and came a cropper.
Now, instead of working through the debts and using Quinn’s obvious talents as a businessman, the bank is effectively trying to financially enslave him.
On one level, the actions of the bank appear vindictive. Quinn certainly thinks so. Last November, he beat the bank to the punch by applying for bankruptcy in the North.
This would have kept the bank at a distance. But IBRC contested the application, and the High Court in Belfast ruled last Tuesday that Quinn’s application be annulled.
This opened up the way for IBRC to apply to bankrupt him in this jurisdiction.
Last Tuesday, outside the High Court in Belfast, he told reporters that the whole bankruptcy issue was “a sham”, created by mostly foreign executives in the bank formerly known as Anglo. He maintains they want to deflect from the fact that they have run his group of companies into the ground since taking them from him last year.
“They have absolutely destroyed it. It’s wrecked. It’s disgraceful,” he said. “They have some people on it full-time, saying ‘look at this, this was wrong, Sean Quinn’s a rogue, he’s a thief, he did this, that and the other wrong’, and all they are trying to do is deflect from what the real disaster is.”
The flight to victimhood is well travelled in this state. Quinn has bought his ticket, but there are some who claim that his is a genuine case. After all, during the decades of his ascent and consolidation, his reputation was that of an honourable man of simple tastes who eschewed the trappings of wealth and never forgot where he came from. Above all, he was, and is, a family man, a father of five.
The value he placed on his reputation was best illustrated in March 2007 when a story about his insurance company, with which he vehemently took issue, was published in a Sunday newspaper. He paid for large ads in the daily press, rubbishing the story and prominently proclaiming: “My word is my bond.”
In the round, the reputation Quinn cultivated was that of a cute, bright and industrious countryman who showed some of the high falutin’, highly-educated business heads exactly how it was done. This image was largely lapped up by a media which welcomed the idea of a tycoon not straight out of central casting.
His downfall, say his supporters, was singularly attributable to an innate weakness for a flutter. Like a lot of others — including most of the financial community — he got it into his head that Anglo was a gem run by genius, and he wanted a piece of the action. One gamble on Anglo’s share price begat another and, before he knew it, he owned 25% of a bank that was heading down the plughole, dragging him with it.
When the bottom fell out of his world, he was quick to declare that he and his family would pay their debts. Those debts have now fallen on the citizens of the state, who own the bank. In reality, the debts weight on an exchequer that is stretched to the point where health and education services are being curtailed.
Yet Quinn, an honourable man, pledged that he wouldn’t be found wanting when it came to cleaning up after his gamble.
“Anything we’ve done we paid a heavy price for it,” Quinn told RTÉ’s Tommie Gorman in 2009. “Me, my company, my family — nobody was ever involved in any impropriety and I’ve no intention of being involved in any impropriety.”
All of which would lead most reasonable people to harbour some sympathy for an extraordinary businessman. The idea that the bank would go after him has upset some people. Quinn’s daughter Aoife told the New York Times last week her family is victim of a vendetta.
“I know they have it out for my father, but they seem determined to bring all of my family down,” she said. “This is no longer about pursuing debts, but some vendetta.”
It might well be asked what point there is to pursuing bankruptcy proceedings. The bank has already secured a number of judgements against Quinn and his family for upwards of €2 billion. There is no prospect of getting more money out of him. If anything, having him declared bankrupt will curtail his ability to function in business.
It will ensure that he can not become a director of a company. If he were fully able to operate, a man of his ability might well generate further wealth, which could be put towards his debt to the citizens.
He will require permission to travel abroad, a ludicrous prospect for a man of his former position. And his bankruptcy may not be discharged for 12 years, when he will be 77 years of age. Effectively, a bankruptcy petition will ensure that Quinn is finished in business.
Bankruptcy is a route that most banks or creditors in general are reluctant to pursue. Anglo bankrupted Sean Fitzpatrick, but that decision was widely viewed as political. Any negotiation on his debt would have kicked up a storm of protest among politicians and the public.
Quinn is a different kettle of fish. He has retained respect and garnered sympathy in some sections of society, and is still a big noise in the border region, where his companies employed thousands of workers. Bankrupting such a man can smack of vindictiveness, when held up to the light in a particular manner.
Except there is another side to the story. As far as the bank is concerned, Quinn and his family have been acting very strangely for people who value honour and integrity.
Before the bank took control of the Quinn Group, its eponymous founder continued to claim that the group was highly profitable. Quinn Insurance, he maintained, was making money hand over fist.
The accounts for 2009, the last year in which Quinn fully controlled the group, were filed just last year and showed a loss of €888 million, which was largely due to losses from Quinn Insurance. The group had made profits of over €200m the previous year, but throughout 2009 Quinn claimed that money was not a problem, despite his gambling losses.
Since the bank took control of the companies, Quinn’s co-operation on giving us back our money has been less than encouraging. The bank claims that any efforts to recoup assets from him are stifled at every turn. From Cyprus to the Ukraine, and Russia to the US, Quinn and the bank are in dispute over what belongs to the former billionaire, which can in turn be handed over to pay us back.
The dispute has seen his wife and adult children drawn into the fray, sometimes with comic results.
Last December, Patricia Quinn provided a sworn statement for the High Court in a case in which IRBC was pursuing a €300m judgement. The money was a loan forwarded to Sean and Patricia in 2007. Now, in light of other disputes, the bank was looking for its money.
Patricia claimed total ignorance of all things financial. She said her husband had used undue influence to get her to sign the loan agreement. In the same vein as the folksy image her husband cultivated, Patricia, who is a director of 91 companies, claimed she has been a homemaker for the past 36 years.
“This is embarrassing to admit, but it is the truth,” she said in a sworn statement in which she said she had no business dealings “beyond deciding upon the weekly groceries and providing for the household expenses”.
If Judge Peter Kelly accepted her claims — which he didn’t — the loan agreement could have been declared invalid. However, he pointed out that under Irish law there had been no presumption of “undue influence” between a husband and wife since 1750. The Quinns produced no evidence to demonstrate what form this “undue influence” might have taken in a marriage that appears rock solid.
The court also heard that efforts to serve the couple with a summons saw a server standing outside the Quinns’ mansion in Co Cavan unable to enter, despite seeing movement within the grounds, which suggested somebody was at home.
Quinn’s own claims in sworn evidence have also raised eyebrows, not least among judges adjudicating on them. In his application for bankruptcy in Belfast, he claimed his business was now largely based in Derrylin, Co Fermanagh and his application should therefore be supported by the court. He produced a commercial lease for an office in the town.
Judge Donnell Deeny found the lease to be “a curious document”. Judges tend to be very careful with their words. He said the document did not appear to have been witnessed by a solicitor.
Headed notepaper supplied by a firm in Tallaght as evidence of Quinn’s defection to the North was also questioned. There was no dated invoice given. Further evidence which he provided of his business interests in the North was in reference to some forestry his family owned in Fermanagh.
Judge Donnell Deeny dealt with this in a summary manner. “He may well have walked some forestry lands leased to his children, but a decision as to whether or not that forestry should be thinned not only does not constitute a business, but is a decision of an hour or two, and one to be financed, as he admits, by his children and not him.”
As with all court proceedings, the evidence was dealt with on the basis of being sworn to be the truth, the whole truth and nothing but the truth.
Despite claiming to be down to his last 50 grand, Quinn has managed to retain a panoply of legal and public relations experts to fight his corner in the courts.
Overall, the judge found Quinn’s claims to be without foundation and annulled the bankruptcy, throwing the businessman back onto the mercy of the courts in the Republic and his former bank.
THE case in Belfast was only one of a number between Quinn and the bank. In Cyprus, IRBC claimed Quinn has sold assets worth $200m to a son-in-law and a nephew for €1,000 and a laptop respectively. If the claims are verified, it will demonstrate that the businessman is moving his assets beyond the reach of the bank and, by extension, the strapped citizens of this country.
In Ukraine, the bank is involved in a tussle over ownership of an expensive shopping centre in which the Quinns had a major share. Similar battles are afoot in Russia. Meanwhile, Quinn and his family are now claiming that the bulk of their debt to Anglo was not a legitimate loan, and therefore they should not have to repay it.
The family is taking a major legal action against the bank in the High Court, due to be heard in the next few months.
The vehicle initially used to purchase shares in Anglo, under the high-risk “contract for difference” system, was registered in the name of Patricia Quinn and her five children. This was for legitimate tax efficiency reasons.
The Quinns are now claiming that, despite being at the heart of a business empire, none of the adult children knew how to go about buying shares “on the stock market or otherwise”, according to legal documents submitted in the case.
Over the course of their dealings with the bank, Quinn’s wife and children signed copious documentation to deal with the loans, but now claim to have known little about what they were at.
Despite all that has emerged about Quinn, he remains a giant in the border region. His record of job creation in a region that had largely been ignored has seen him through his current difficulties in the eyes of many in Cavan and Fermanagh.
The bank, however, has other fish to fry. Primarily, it is charged with getting our money back. And despite cries of foul, it is easy to see why, from its point of view, the bankrupting of Quinn is necessary.
A WIND energy company which was controlled by members of Sean Quinn’s family has been placed into administration.
An administrator was appointed to Quinn Wind Energy Ltd this week, but it is not yet clear who appointed them.
Mortgage documents suggest that the company controlled the Slieve Rushen wind farm near Derrylin, Co Fermanagh. The company’s most recent accounts are for the year ended December 2009 and were signed off on December 22, 2011.
They list the firm’s bankers as Bank of Ireland and the balance sheet suggests the bank is owed about £12m (€14.5m).
The company’s registered office is at Derrylin. Its director is Mr Quinn’s son, Sean Jr, and the company secretary is Mr Quinn’s daughter, Colette.
Quinn Wind Energy had a turnover of £9.7m in 2009 and showed a pre-tax loss of £1.7m.
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