STATE-OWNED Anglo Irish Bank examined the validity of its security over shares in the Quinn Group backing loans of €2.3 billion to founder Seán Quinn in anticipation of legal action by him.
Lawyers for the bank have assessed the security it holds over shares in Quinn Group (ROI), the parent company, over the group’s manufacturing, property, financial services and hotel businesses.
Anglo took a legal charge against shares held by Mr Quinn’s children in 2008 as he borrowed heavily from the bank to meet losses on his investment arising from the bank’s collapsing share price in the 2008 financial crash.
The Quinn family are preparing legal proceedings against the bank relating to events over the past two years that led to their losing control of the Quinn Group. The legal action is said to be imminent.
The lawsuit will focus on the legality of the bank’s share charges dating back to 2008.
The bank and lenders to the group took control of the business last month with the appointment of a receiver using the charge over the family’s shares in the group.
Anglo’s lawyers have also examined the bank’s involvement in the Maple 10 transaction where a 10 per cent shareholding in the bank was transferred from Mr Quinn to 10 customers using Anglo loans.
The bank has been reassured by its lawyers about the validity of the loan charges on the shares and will vigorously defend any action.
Representatives for the family have, in preparation for their legal action, considered arguments made by former Anglo head of lending Tom Browne in his defence of an action taken by the bank over debts of €50 million.
Mr Browne has claimed that his loans have been invalidated due to Anglo’s alleged fraudulent misrepresentation over its “silence” in relation to the Quinn loans and matters relating to its share price.
He has argued that the Quinn loans were provided to enhance the bank’s share price artificially.
Last month the Commercial Court ordered Anglo to hand over information about the amount and purpose of loans to the Quinns.
It has emerged that Anglo has offered Mr Quinn the opportunity to remain in his Co Cavan home if he co-operates with the bank on a proposal to reduce his borrowings. Anglo has personal guarantees from Mr Quinn, whose family owes the bank €2.88 billion.
