THE FINANCIAL Regulator’s application to have the appointment of two joint administrators to the Quinn Insurance group confirmed by the High Court has been adjourned for a week.
John Hennessy SC, for regulator Matthew Elderfield, told Mr Justice Nicholas Kearns yesterday that he was seeking an adjournment because the regulator wished to respond to a lengthy affidavit filed on behalf of the company.
The court had last month approved the appointment of Paul McCann and Michael McAteer of Grant Thornton as joint provisional administrators to Quinn Insurance Ltd, Dublin Road, Cavan.
Their appointment was sought during an ex-parte (one side only) application by the Central Bank, acting through the Irish Financial Services Regulatory Authority (Financial Regulator).
The regulator said the application arose given his “very serious concerns” about the financial position of the Seán Quinn-founded company.
When the case returned to court yesterday, Mr Hennessy said, while the company’s affidavit did not address the regulator’s “very serious concerns” about Quinn Insurance’s position, it merited “careful consideration” and a response by the regulator.
Counsel suggested the regulator would file its reply to Quinn Insurance’s affidavit by Wednesday of this week and the company could file any response to that by Friday.
The regulator was anxious that the application to confirm the administrators should go ahead as soon as possible, counsel added.
Michael Cush SC, for the company, said it was consenting to the adjournment but suggested its response could be filed by next Monday rather than Friday. Counsel suggested the matter could be heard later next week.
Mr Justice Kearns, noting the importance and the urgency of the matter, directed it should proceed next Monday.
He also ordered that the provisional administrators remain in place until the full hearing has concluded.
Bernard Dunleavy, for the provisional administrators, said they had prepared a report, which was filed with the court.
Two weeks ago, Mr Justice John Cooke appointed provisional administrators to Quinn Insurance, under Section 2 of the 1983 Insurance No 2 Act.
The regulator had claimed the company had “significantly breached” its solvency ratios and its subsidiaries had entered into a series of guarantee agreements that had reduced its assets by some €448 million.
It was also claimed the company had failed to deliver a financial plan aimed at restoring its financial health.
The regulator said the application was “urgent” because of concerns about the way the company was conducting its affairs and its abilities to comply with supervisory regulations.
The company, it was claimed, was unable to comply with the requirements of the supervisory regulations of the Act because it had failed to make adequate provisions for its debts, including contingent and prospective liabilities.
It was claimed in an affidavit by Domhnall Cullinan, of the Financial Regulator, that the manner in which Quinn Insurance was conducting business “was jeopardising and prejudicing the rights and interests of those who have insurance policies with the company”.
The appointment of administrators to Quinn Insurance would assist in the maintenance of the public interest of proper and orderly regulation, it was claimed.
