A $45 MILLION property debt was transferred from one of bankrupt businessman Seán Quinn’s companies to put it beyond the reach of a creditor bank, a Belfast High Court judge ruled yesterday.
Mr Justice Bernard McCloskey held that those responsible for the loan assignment over a Ukrainian shopping centre were “indulging in an orchestrated, elaborate and illicit charade”.
He is to declare all disputed transactions null and void next week and return control to the former Anglo Irish Bank. His ruling strengthens the renamed Irish Bank Resolution Corporation’s attempt to recoup more than £2 billion it claims to be owed.
Proceedings were issued against the British Virgin Islands-registered Lyndhurst Development Trading in order to seize control of the mall in Kiev.
The bank claimed assets were stripped to prevent it securing money owed to it. A chain of loan assignments was under scrutiny in the case.
Fermanagh-based Demesne Investments, of which Mr Quinn is a former director, had been owed $45 million by Univermag, the Ukrainian owners of the shopping centre.
But in April 2011, Demesne transferred its rights to the debt to Innishmore Consultancy, another Northern Ireland company, run by Mr Quinn’s nephew, Peter Quinn. From there the loan was transferred to Lyndhurst last October.
Lawyers for IBRC argued that the assignment was a sham, carried out at a massive undervalue and not worth the paper it was written on.
No defence was offered in the case after Lyndhurst’s legal team came off record.
Mr Justice McCloskey said: “The abrupt, unexplained and prima facie irrational assignment of a company asset, the $45 million debt of which Demesne was the beneficiary, for nothing, or at most something truly minimal, speaks for itself.
“When considered in conjunction with the other related impugned transactions, it is patent that the participants were indulging in an orchestrated, elaborate and illicit charade.
“Based on the available evidence, this exercise had no purpose other than to put this asset beyond the reach of legitimate creditors and/or to prejudice their interests.”
