The family of bankrupt businessman Sean Quinn have hinted at a possible challenge to new laws halting their action alleging the former Anglo Irish Bank unlawfully "shovelled" some €2.34 billion loans into their companies to prop up its plummeting share price.
Lawyers for the family today asked the Commercial Court to lift the stay on their case, applied immediately last week in tandem with the passing into law of the Irish Bank Resolution Corporation Act liquidating the Irish Bank Resolution Corporation, formerly Anglo.
If the court rules the Act does not allow it to lift the stay, the Quinns "will reserve our position in relation to any steps to be taken later", their counsel Ross Aylward said.
Mr Justice Peter Kelly said he was faced with a "conundrum" as there is an issue whether the Act gives any power to the courts to lift what the Act describes as an "immediate stay" on all "existing proceedings" against IBRC. There was also an issue whether he could even permit such an application to be brought.
The wording of the IBRC Act appeared "very clear" in that it provides for "an immediate stay" on all "existing proceedings" against IBRC with no entitlement for the courts to lift those stays as the Act disapplied provisions normally allow for lifting stays, he remarked.
While the reference to all proceedings might "not be as stark" as it appears, the exact meaning of the relevant provisions should be thrashed out fully in a hearing on March 7th, he said.
The Quinn action is the first main piece of litigation where the issue arose but the outcome of the March 7th hearing will affect many other existing proceedings against IBRC which appear captured by the stay, the judge noted. The stay applies only to "existing" proceedings against IBRC and does not prevent the bringing of new actions, he added.
The action by Patricia Quinn and her five children against IBRC was initiated in 2011. They claim they are not liable for €2.34 billion loans made to Quinn companies on grounds those loans were made in breach of Section 60 of the Companies Act and Market Abuse Regulations.
While the full hearing of the case has been "parked" pending criminal proceedings against former Anglo chairman Sean FitzPatrick and others, various pre-trial matters were continuing until the IBRC Act was passed last week.
The family's lawyers were due to inform the judge today whether they intended to proceed with an application to join the Department of Finance and Central Bank - as regulator of the banks - as co-defendants with IBRC.
In court today, Paul Gallagher SC said he was representing IBRC in the matter and was instructed by the special liquidators of the bank.
When Mr Justice Kelly expressed concern whether the court could even permit the Quinns bring an application to lift the stay, Mr Gallagher said he would not object to the application being made but had no instructions at this stage on the issue whether the court could lift the stay. He could see the issue that arose for the court, counsel added.
Mr Gallagher said the issue raised by the family in their action - whether the bank has valid security for loans which they allege were unlawfully made - also arose in the bank's own action against various Quinn family members alleging a scheme to put assets beyond its reach. Patricia Quinn is not involved in the latter action, he added.
Mr Gallagher also said the IBRC Act as passed by the Oireachtas last week is still not available for examination but he did not believe there had been any amendments to the Bill seen by the court.
Mr Justice Kelly said it was very unusual and very unsatisfactory that the court and the parties have to operate without a copy of the Act.
Last week, Martin Hayden SC, for the Quinns, said the IBRC Act appeared "to sanitise" the family's claim Anglo had breached Section 60 of the Companies Act - which makes it unlawful for a company to advance loans to buy its own shares - in making the €2.34 billion loans. The Act raised "many areas of complexity" and drew a distinction between those being sued by the bank and those suing it, he also remarked.
