Fraud proceedings are under active consideration in a case where the Irish Bank Resolution Corporation is seeking to seize European properties linked to unpaid loans advanced to companies owned by the children of Seán Quinn.
There was no representative for the bankrupt businessman's family at the High Court in Belfast today when injunctions against two offshore companies were continued by Mr Justice McCloskey at the instigation of IBRC - formerly Anglo Irish Bank.
The companies, based respectively in Belize and the British Virgin Islands, have assets (assigned loan agreements) that link them to a Quinn family company called Demesne Investments Ltd, with an address in Mr Quinn’s home village of Derrylin, Co Fermanagh.
The loan agreements are affecting the ability of IBRC to seize an office block in Moscow valued at up to $180 million (€140 million) and a shopping centre in Kiev valued at up to $60 million. The two buildings are believed to be producing annual rental income of approximately $30 million in total, which the State-owned bank has not been able to assert control over.
The court in Belfast has told the two offshore companies and their officers that they must not deal in the assigned loan agreement or take any steps designed to prevent IBRC from applying to the court to have agreements entered into by Demesne and the offshore companies from being set aside.
The offshore companies are Galfis Overseas Ltd, of Belize, and Lyndhurst Development Trading SA, of the BVI. The court was told that IBRC has secured a Norwich Pharmacal order from the courts in Belize, instructing Galfis to reveal its beneficial owner.
Mark Horner QC, for IBRC, said it is pursuing a similar order against Lyndhurst in the BVI. He said there is an air of urgency in the case of Galfis in particular as it has launched bankruptcy proceedings in Russia against the company there that owns the Moscow tower block.
He suggested an early hearing of the main issue before the court and told Mr Justice McCloskey that there may be further proceedings initiated in the case including contempt of court proceedings. He said fraud and breach of fiduciary duty proceedings are also under active consideration.
Injunction orders were issued on December 21st and 23rd respectively against Galfis and Lyndhurst. In the former, Demesne Investments was the second named defendant and the court heard that Demesne had assigned loan agreements to Galfis.
In the Lyndhurst case, the court was told that Demesne entered into a loan agreement with another defendant company, Innishmore Consultancy Ltd, and Univermag, the Ukrainian company that operates the Kiev shopping centre, on April 6th, 2011. It was also told that Innishmore entered into an agreement with Lyndhurst on October 7th, 2011. Lyndhurst then made a supplementary loan agreement on November 4th, 2011, with Univermag.
On December 26th, the courts in Kiev registered a judgment order for $45.2 million in favour of Lyndhurst and against Univermag. IBRC has described the order as “legalised robbery” and said it expects bankruptcy proceedings to follow.
In continuing the injunction orders to January 26th, Mr Justice McCloskey said he apprehended that there could be significant developments in the case in the coming months, including the possibility that IBRC might expand the proceedings as the fund of information available to it became more extensive.
