Quinn family pursue bank for full disclosure of data

THE FAMILY of bankrupt businessman Seán Quinn wants full details from the former Anglo Irish Bank as to how aware its board of directors, executives and others were about the difficulties facing the bank from September 2007 to 2009 as a result of the Quinn stakeholding in the bank, the High Court heard yesterday.

They also want details of bank personnel involved in making allegedly illegal loans to Quinn firms to prop up the bank’s share price.

The bank has agreed to discover some categories of documents, has objected to others and wants to limit some categories to the end of October 2008 when the making of loans to the Quinn companies ceased. It also wants orders requiring the family to provide security for the costs of discovering thousands of documents.

Brian Murray SC, for the bank, argued the extent of discovery being sought was huge and unnecessary. If granted, it would impose costs of up to €1 million and take considerable time. The more limited discovery, to which the bank was agreeable, would already involve costs of up to €600,000.

The family want the documents for their action aimed at avoiding liability for loans of more than €2.3 billion made by Anglo to various Quinn group firms from autumn 2007. They allege the loans are unenforceable as they were made for the illegal objective of propping up the bank’s falling share price.

Anglo, now Irish Bank Resolution Corporation, denies those claims and says additional loans of some €500 million are unaffected by the allegations of illegality.

The bank has joined Seán Quinn snr and two former senior executives with the Quinn Group – Liam McCaffrey and Dara O’Reilly – as third parties for the purpose of claiming indemnity against them on grounds the three were allegedly central to a strategy to make Contract for Difference (CFD) investments in Anglo from 2005.

A date has yet to be set for the hearing of the action, brought by Mrs Patricia Quinn and the five children, expected to last several months and to cost millions.

Mr Justice Michael Moriarty yesterday began dealing with a number of preliminary applications, including the bank’s application for security for costs of the discovery and applications by both sides for discovery of certain documents.

Bill Shipsey SC, for the family, said their case was that the Anglo board and executive were, from September on, “monitoring and managing” the provision of loans to meet margin calls on contracts for difference held in the bank on behalf of the five adult Quinn children but without their knowledge.

Counsel argued the time limits which the bank sought to impose on the discovery sought in some categories were “neither warranted nor reasonable”.

The bank has agreed to discover files relating to loans made to the family from January 2003 to August 31st, 2007, and will also discover documents relating to the purpose, nature or motivation for loans made between September 1st 2007 and March 31st, 2009. It objects to disclosing documents related to “any repayment proposals” from September 2007 to March 2011 on grounds that is unnecessary and irrelevant.

The family want documents up to March 31st, 2009, evidencing the bank’s knowledge of the Quinn CFD positions in its shares and relating to the effect of the disposal of those CFD positions on its share price but the bank says the cut-off point for that discovery should be October 31st, 2008.