June 17, 2024

Judge Blocks a Bankruptcy in Northern Ireland

A judge in Belfast on Tuesday rejected an attempt by Sean Quinn, once considered Ireland’s richest man, to declare bankruptcy in Northern Ireland rather than in his home country, where terms are tougher.

Mr. Quinn, 65, had been accused of “bankruptcy tourism” by creditors seeking to collect almost 3 billion euros ($3.8 billion).

Mr. Quinn, whose family has owned a farm in Northern Ireland for nearly five generations, now faces the prospect of bankruptcy in the Republic of Ireland, where rules could prevent him from getting back in business for as long as 12 years, as opposed to 12 months in Northern Ireland.

The Irish Bank Resolution Corporation, formerly Anglo Irish Bank, had challenged his bankruptcy application in Northern Ireland, arguing that the real center of his interests was his home in Ballyconnell, County Cavan, near the Northern Ireland border.

The case is part of an effort to consolidate control of Mr. Quinn’s international properties and the Quinn Group, which the resolution corporation seized last April, including its headquarters in Derrylin, County Fermanagh, Northern Ireland.

Mr. Quinn’s international conglomerate of cement factories, luxury hotels, pubs and wind farms collapsed over the last two years after he placed huge bets on financial derivatives known as contracts for difference to speculate on the value of Anglo Irish shares.

The High Court judge on the case in Northern Ireland, Donal Deeny, annulled Mr. Quinn’s bankruptcy declaration Tuesday morning. In his written ruling, he raised doubts about a lease dated last May and submitted as evidence of Mr. Quinn’s long-term office base in County Fermanagh in Northern Ireland, a rental for about 60 euros ($77) a month.

The judge called it a “curious document” because it was written in legal language but not witnessed by a lawyer. He also noted that Mr. Quinn lacked a passport for Britain.

Outside the courtroom, Mr. Quinn, who grew up in the borderlands of County Fermanagh, was defiant, calling the bank’s case a sham and saying that he had never worked anyplace else.

“I worked in Derrylin six days a week, not five,” he said.

“What Anglo Irish has done to the Quinn Group is like somebody taking a sledgehammer to a child’s toy — they’ve destroyed it,” he said. “It’s wrecked.”

When asked if he had misled the court, he replied: “I’ve never misled anybody in my life. Everything I always promised, I always done.”

The Irish Bank Resolution Corporation is already pursuing a bankruptcy case against Mr. Quinn in Ireland. It is “determined to recoup its costs and to maximize recovery for the taxpayer and the state,” a statement issued after the court ruling said.

The Quinn case has raised awareness among other debtors about the prospects for seeking financial refuge in other European countries. At least three failed Irish property developers have declared bankruptcy in Britain, including Ray Grehan, who owes 312 million euros to the National Asset Management Agency, the state-owned bank created to take ownership of nonperforming loans.

Anthony Joyce, a lawyer in Dublin who advises mortgage holders with large debts, said he was surprised that Mr. Quinn had not taken the step of moving his residence to Northern Ireland. He said that could be an alternative that Mr. Quinn could pursue.

“We get calls every day from people with serious debt problems, and they are looking at this as an option,” Mr. Joyce said, noting that typically they moved to London for six months before filing for bankruptcy to take advantage of less-onerous laws.

Several other rulings are expected this month in the struggle between Mr. Quinn and Anglo Irish, which was nationalized in 2009. Besides the bankruptcy case, the bank is in litigation elsewhere to take control of property owned by the Quinn family in Russia, Ukraine and India.

A judge in Cyprus is expected to rule this month in a clash over several offshore companies claiming debts against the Quinn properties of more than 500 million euros.

Article source: http://www.nytimes.com/2012/01/11/business/global/belfast-judge-blocks-bankruptcy-in-northern-ireland.html?partner=rss&emc=rss