Irish Bank Resolution Corporation (IBRC), which is owned by the State and is currently subject to a liquidation process has been seeking control of security relating to very substantial loans to companies which were owned and controlled by the Quinn family. The total value of this lending was approximately €2.8 billion. The Bank sought to enforce its security in April 2011 only to discover that steps had been taken to undermine the value of that security. It is the Bank's position that these steps were executed pursuant to a fraudulent conspiracy between members of the Quinn family. The Bank commenced proceedings in June 2011 in Ireland in respect of this conspiracy and obtained a number of injunctions against members of the Quinn family. The Bank's position is that both prior to and following the commencement of the conspiracy proceedings that members of the Quinn family have used every means at their disposal to hide assets from the Bank. Extensive efforts have been made by the Bank to retrieve assets in a range of jurisdictions with limited success.
Prior to the appointment of the Joint Special Liquidators (JSLs) to IBRC in February 2013, the Bank was informed through a solicitor, that two former clients of his (the informants) had information pertaining to the assets held by the Quinn family. The Informants requested that an agreement be put in place between them and the Bank to recompense them for providing information. Before entering into an agreement, the Bank undertook due diligence on these two people to establish their credibility.
Following this due diligence, the Board of IBRC decided that it was incumbent on the Bank to do what it could to establish the truth of the information promised by the informants in order to ensure that any assets properly belonging to the Bank be discovered. The Board initiated an agreement with the informants. This agreement was on the basis of a percentage of any funds retrieved directly through information provided by the informants.
When the JSLs were appointed in February 2013, they were appraised of the proposed agreement which had not been fully concluded. The JSLs are under a legal duty to realise assets and pay creditors including the Irish taxpayer. Having reviewed all of the details pertaining to this, the JSLs formed the view that the proposed arrangement was appropriated as it would only arise if funds were retrieved as a result of information provided by the informants. In March 2013, an agreement between the Bank and the informants was signed providing that they would receive 3% of any cash recoveries.
The JSLs note that this information was detailed in an affidavit sworn by them and opened in the English High Court.
This arrangement is a matter for JSLs who have been appointed to maximise the overall return for creditors in the liquidation including the Irish taxpayer.