Former billionaire Seán Quinn and other members of his family have sought to strip family companies of valuable assets in an effort to stop state-owned Irish Bank Resolution Corporation from effecting securities on loans worth hundreds of millions of euro, the High Court was told today.
Paul Gallagher SC, for Ibrc, made the claim as he was opening the bank's case before Ms Justice Elizabeth Dunne in a contempt of court case taken by the bank against Mr Quinn, his son, Sean Quinn junior, and Mr Quinn's nephew, Peter Darragh Quinn.
The defendents are contesting the claims and saying that any actions they took were taken prior to injunctions issued by the High Court in June and July 2011.
Mr Quinn, his son, and his nephew were in court and are expected to be called to give evidence. The case is expected to last a number of days.
The court heard that Mr Quinn had established a labyrinthine structure of companies which bought valuable properties in Russia, the Ukraine, India and Turkey, for the benefit of his five adult children.
Loans were issued to the companies by Anglo Irish Bank, which is now part of Ibrc, and the bank took out share pledges and guarantees against the companies involved.
When the Quinns were unable to repay debts of €2.8 billion to the bank, a receiver was appointed to the family's Irish companies and to the Swedish companies through which the international property portfolio was held.
However, according to Mr Gallagher, the family began to effect a series of measures around the same time which were designed to strip the companies of the properties.
When the bank took an action last year against the family, called the conspiracy case, Mr Justice Frank Clarke, who has since been appointed to the Supreme Court, issued injunctions to prevent any further such moves.
The respondents, Mr Gallagher said, told the bank that any steps taken were taken prior to the first injunction, on June 22nd, 2011. However the bank now believes steps were taken post this date and that the "prime movers" were Mr Quinn and his nephew, with Seán Quinn junior being involved in one contempt.
He said debts worth many tens of millions of dollars had apparently been sold to parties the Quinn family said they did not know, for a total consideration of $2,900.
While the family contended these transfers occurred prior to the date of the injunctions, the bank believed the evidence was that they occurred afterwards. The family, according to Mr Gallagher, has said it assigned a valuable debt agreement to a Mr Gurnyak, who, he said, was apparently a former railway worker in the Ukraine.
Very, very valuable debts, he said, were sold at a very substantial undervalue, to a seemingly unknown third party.
Mr Gallagher said the family, in separate proceedings, is contesting the validity of the debt of €2.8 billion due to IBRC, for reasons to do with alleged market abuse connected with investments in Anglo shares, but the bank had received a letter from the family's solicitor in March of last year where it was acknowledged that €455 million of the debt was to do with valid investment in the foreign property portfolio.
The case continues.
