Northern Ireland

Court bid to seize Ukrainian mall in Quinn assets quest

A $45m loan agreement linked to bankrupt tycoon Sean Quinn is hardly worth the paper it is written on, the High Court in Belfast has heard.

The Irish Bank Resolution Corporation is seeking an order enabling it to claw back an assignment on assets including a Ukrainian shopping centre.

It wants to seize the mall in Kiev as part of a bid to recoup more than £2bn.

The bank fears assets may have been stripped to prevent it securing the money it claims to be owed.

A chain of loan assignments were under scrutiny in the case. The first was from Fermanagh-based firm Demesne Investments, of which Mr Quinn is a former director, to Innishmore Consultancy, another Northern Ireland company run by his nephew Peter Quinn.

From there the debt was transferred on to the British Virgin Islands-registered Lyndhurst Development Trading, the defendant in the case.

With Demesne having been switched to a joint-plaintiff, and Innishmore offering no defence in the case, the bank's action focused on Lyndhurst alone. It was claimed that within insolvency law the assignment involved a massive undervalue.

Gabriel Moss QC, for the bank, told the court Sean Quinn was "causing Demesne to strip out his property in favour of a company (Innishmore) owned and controlled by his nephew Peter Quinn".

Turning to the transfer on to Lyndhurst, he said there was no evidence that any of the $45m had been paid. In his view any pledge from such a company to come up with the money had no weight.

"A promise from perhaps Rothschild or even the Royal Bank of Scotland might be worth something, whereas a promise from a shelf company is hardly worth the paper it's written on," Mr Moss contended.

He said it amounted to "a worthless promise from a worthless company". A written agreement to pay the debt was not genuine, the barrister claimed. "That is a sham consideration set out there," he added.

Submissions were made in the absence of any lawyers for the defendant. Lyndhurst's legal team withdrew from the case with the court's approval before the main hearing got underway.

With proceedings against the Quinn family also ongoing in the Irish Republic, Mr Moss argued that the motive for the Innishmore to Lyndhurst assignment was clear.

"The purpose of it was plainly on the part of Peter Quinn - this is confirmed by his evidence in the south - was to make sure that the property went out from the reach of the bank and Demesne."

Mr Justice McCloskey will deliver judgment in the case later.