The Quinn Collapse

Tyler · **Joined:** Sep 24, 2008 **Posts:** 2083

Interesting who knew what and when in terms of share price support

The s60 charges seem a red herring and may be easily defended.

However the media focus on the Quinn case is useful for government etc in being seen to "defend" taxpayers

london_irish · **Posted:** Sun Jul 29, 2012 5:07 pm

http://www.independent.ie/opinion/analy ... 82544.html

Quote:

...When the former Anglo -- now Irish Bank Resolution Corporation (IBRC) moved to recover the family's €2.8bn loans last year, it was Peter who urged Sean Quinn to start hiding the family's' foreign assets. As the bank closed in last April, preparing to oust the family from the business, Sean Quinn told Peter to proceed with his plan, which he pursued for the next year with the patriarch's full imprimatur.

According to Peter's own testimony, he hired a firm of Russian lawyers to come up with a scheme and a company in Dubai to help it along. It involved moving debt to other entities that would effectively serve as "fronts" for the Quinns, other unsecured assets would be sold for a token sum on the proviso that they would be bought back by the Quinn family later. Effectively, Peter's plan meant the family ceded control of their assets to strangers, with an agreement that they would either buy them back later or get a cut of whatever cash they had realised.

They took a risk, and according to the Quinns, it backfired.

Faced with Ms Justice Dunne's three week deadline to reverse the transfers of face jail, the family held a meeting to "assess their options". As Peter put it, the Russian law firm was "central" to implementing the plan to keep the bank from their properties and was now "central" to reversing it. The family agreed on a last-ditch dash to Russia to enlist its help in starting the asset reversal.

Having instigated the plan, it is interesting that it wasn't Peter who was dispatched to undo it, but Sean Jnr. Compared to Peter, he was a relative novice when it came to doing business in Russia or Ukraine -- his interest in the family business had largely been confined to Europe....

Jaw dropping stuff to be honest, if this article is accurate.

JohnnyTheFox · **Joined:** Oct 20, 2010 **Posts:** 1280

london_irish wrote:

http://www.independent.ie/opinion/analysis/maeve-sheehan-quinns-pr-blitz-cant-hide-plan-that-has-backfired-3182544.html

Quote:

...When the former Anglo -- now Irish Bank Resolution Corporation (IBRC) moved to recover the family's €2.8bn loans last year, it was Peter who urged Sean Quinn to start hiding the family's' foreign assets. As the bank closed in last April, preparing to oust the family from the business, Sean Quinn told Peter to proceed with his plan, which he pursued for the next year with the patriarch's full imprimatur.

According to Peter's own testimony, he hired a firm of Russian lawyers to come up with a scheme and a company in Dubai to help it along. It involved moving debt to other entities that would effectively serve as "fronts" for the Quinns, other unsecured assets would be sold for a token sum on the proviso that they would be bought back by the Quinn family later. Effectively, Peter's plan meant the family ceded control of their assets to strangers, with an agreement that they would either buy them back later or get a cut of whatever cash they had realised.

They took a risk, and according to the Quinns, it backfired.

Faced with Ms Justice Dunne's three week deadline to reverse the transfers of face jail, the family held a meeting to "assess their options". As Peter put it, the Russian law firm was "central" to implementing the plan to keep the bank from their properties and was now "central" to reversing it. The family agreed on a last-ditch dash to Russia to enlist its help in starting the asset reversal.

Having instigated the plan, it is interesting that it wasn't Peter who was dispatched to undo it, but Sean Jnr. Compared to Peter, he was a relative novice when it came to doing business in Russia or Ukraine -- his interest in the family business had largely been confined to Europe....

Jaw dropping stuff to be honest, if this article is accurate.

I smell a rat. According to the SBP today when the IBRC were reviewing SQ jr's recent expenditure they were surprised to find no mention of any outgoings related to his recent trip to Russia. Further investigations revealed that the bills were settled by a company that the Quinns were claiming was beyond their control. After this discover the company apparently informed the IBRC that it would be settling no more bills for the Quinns. If it was really owned and controlled by a third party why would it even bother to communicate with the IBRC. It would have no reason to. On the other hand if it is still really controlled by the Quinns, but they want to present a picture to the courts that it isn't, then that communication might make sense.

doccyboy · **Joined:** Dec 30, 2007 **Posts:** 40

http://www.bbc.co.uk/news/uk-northern-ireland-19035960

The lad does not look so chipper.

woger · **Joined:** Jul 10, 2009 **Posts:** 1256

Still has the support from a lot the locals.
http://www.rte.ie/news/2012/0729/sean-quinn-anglo.html

Negative Covenant · **Joined:** Mar 4, 2009 **Posts:** 1049

@the edge

If this saga were a Shakespearian tragedy then one could have spotted that SQ had sinned log ago and was doomed to sticky end no matter how much of a hero he seemed to some.

A. Insurance – a taste for other people’s money

It would appear that he fundamentally misunderstood or ignored the nature of insurance in the pursuit of his own gain.

Insurance is a trust business, you seek to provision correctly out of current premia the risks which you are underwriting. People take out insurance trusting that that the insurer is taking in appropriate premia to guard against the aggregate risk of all insurance policies (which is largely predictable) together with a profit element for the insurer. They also trust that the funds and assets held to guard against the risk will be will be available to discharge such liabilities to the intent that their insurance will work.

It has been alleged that the Quinns did three things in relation to the insurance business.

Firstly, they used aggressive tactics to try and make consumers (who are by definition vulnerable) to settle earlier than they should settle and for less than the full value of their claim. It is alleged that retired Gardai were used in this regard. Insurance is supposed to cover risk, not to avoid risk.

Secondly, it is alleged that they under provisioned to try and gain market share. This is particularly evident in relation to their foray into professional indemnity insurance I the UK where they got flayed alive until the receivers stopped it. It is alleged that this was done in the interests of gaining cash-flow and market share ahead of abiding by proper principals.

Thirdly, and most seriously, it is alleged that by way of guarantees between group companies and loans to family members which were written off, that they put the assets of the insurance business at risk in support of the wider Quinn Group and thereby the Quinn family.

These are allegations of heinous activity. Sean Quinn has been fined a huge amount in this regard, the regulator has stepped in and taken the companies away and all insurance holders in Ireland have been hit with a levy to pay off the loss so that the company can be sold as a going concern without the loss which nobody would take on.

B. Anglo Gamble – Moral Hazard

After getting a taste for the potential megabucks that they now understood could be garnered by getting their hands on other people’s hard earned cash, Sean Quinn then decided he would buy a bank. (In this regard maybe John Waters right - SQ is like the traders who risked billions of other people’s money in pursuit of their bonus). He decided he would do it by leveraging himself way beyond his wealth. He further decided to avoid the rules where by the integrity of the stock market and companies are protected by doing it via contracts for difference.

When the sh1t hit the fan, the bank was faced with a situation where Sean Quinn’s failed gamble was going to destroy the bank unless they devised a dodgy scheme to clean it up. His personal actions were at the root cause of this particular shit-storm.

Sean Quinn may say he did not contract with the state, and he only contracted with a private institution and that is correct. However, he saw a moral hazard situation and went quids-in. He thought they would never call him out on his insurance business or on his bank dealings and if it wasn’t for the global financial disaster he may have succeeded at our expense in the face of lesser difficulties.

However, this line that he was willing to take the hit on his losses and walk array was bull-crap. Any effort by him to divest himself of his humongous lump of Anglo shares held on foot of CFD’s would have collapsed the share price leaving him nursing a loss for the full amount.

Don’t forget that apart from the losses taken by his family which may be on foot of illegal contracts, he also off-loaded a huge portion of his problem onto Anglo which they tried to get other borrowers to take on.

C. Contempt of Court

Let’s be clear here. The main problem the Court has is not that Sean Quinn and co have sought to protect their assets but rather that they did so after the Court ordered that the assets must be protected for Creditors. The Court believes (and nobody other than the Quinns disagee after the Daily Mail videos) that the Quinns acted against a direct order of the High Court. We have rules called laws and we have independent Courts who we go to if we disagree on what should happen according to the rules. (This is what the Quinn family are doing in saying the loans made to them to buy shares were illegal - I think they are right on that score). The Court has seen that the Quinns have decided they are above the law of the land.

The Quinns have said (i) that they put their scheme in place before the injunctions and (ii) that their scheme has somehow backfired and they have been duped of the cash. The Court is saying in relation to (i) that it has been proved beyond a reasonable doubt that they did not do it before the injunction was in. In relation to (ii) Judge Dunne has further said that she does not believe the cash is beyond their reach. This seems to be based on the fact that (a) the Quinns are not that stupid, (b) the Quinn story does not add up (i.e., they are still lying about what happened), and (c) even if it is true, it is their actions in contempt of court that have put the assets at risk and beyond their reach – it is their illegal actions that have brought them to this situation so they should bear the punishment the same as if the assets were within their reach and they refused.

So, the answer to John Waters is that the Quinns have been brought to this sorry situation as a result of three serious sins – they sinned morally and legally against consumers in Quinn direct, they sinned morally against the population in destabilising the banking system through under-the counter deals they could not finance, and they sinned morally and legally against the taxpayers and the state and the rule of law by seeking to asset strip and take monies which they were not entitled to out of companies which should have had their assets applied to debts.

What else could they have done wrong that they didn’t do wrong?

[BTW - I do not include the wider family in "the Quinns" - just the three found guilty of cotempt - the others may be down as receiving wages but who knows if they ever actually got them.]

JohnnyTheFox · **Joined:** Oct 20, 2010 **Posts:** 1280

Negative Covenant wrote:

@the edge

If this saga were a Shakespearian tragedy then one could have spotted that SQ had sinned log ago and was doomed to sticky end no matter how much of a hero he seemed to some.

A. Insurance – a taste for other people’s money

It would appear that he fundamentally misunderstood or ignored the nature of insurance in the pursuit of his own gain.

Insurance is a trust business, you seek to provision correctly out of current premia the risks which you are underwriting. People take out insurance trusting that that the insurer is taking in appropriate premia to guard against the aggregate risk of all insurance policies (which is largely predictable) together with a profit element for the insurer. They also trust that the funds and assets held to guard against the risk will be will be available to discharge such liabilities to the intent that their insurance will work.

It has been alleged that the Quinns did three things in relation to the insurance business.

Firstly, they used aggressive tactics to try and make consumers (who are by definition vulnerable) to settle earlier than they should settle and for less than the full value of their claim. It is alleged that retired Gardai were used in this regard. Insurance is supposed to cover risk, not to avoid risk.

Secondly, it is alleged that they under provisioned to try and gain market share. This is particularly evident in relation to their foray into professional indemnity insurance I the UK where they got flayed alive until the receivers stopped it. It is alleged that this was done in the interests of gaining cash-flow and market share ahead of abiding by proper principals.

Thirdly, and most seriously, it is alleged that by way of guarantees between group companies and loans to family members which were written off, that they put the assets of the insurance business at risk in support of the wider Quinn Group and thereby the Quinn family.

These are allegations of heinous activity. Sean Quinn has been fined a huge amount in this regard, the regulator has stepped in and taken the companies away and all insurance holders in Ireland have been hit with a levy to pay off the loss so that the company can be sold as a going concern without the loss which nobody would take on.

B. Anglo Gamble – Moral Hazard

After getting a taste for the potential megabucks that they now understood could be garnered by getting their hands on other people’s hard earned cash, Sean Quinn then decided he would buy a bank. (In this regard maybe John Waters right - SQ is like the traders who risked billions of other people’s money in pursuit of their bonus). He decided he would do it by leveraging himself way beyond his wealth. He further decided to avoid the rules where by the integrity of the stock market and companies are protected by doing it via contracts for difference.

When the sh1t hit the fan, the bank was faced with a situation where Sean Quinn’s failed gamble was going to destroy the bank unless they devised a dodgy scheme to clean it up. His personal actions were at the root cause of this particular shit-storm.

Sean Quinn may say he did not contract with the state, and he only contracted with a private institution and that is correct. However, he saw a moral hazard situation and went quids-in. He thought they would never call him out on his insurance business or on his bank dealings and if it wasn’t for the global financial disaster he may have succeeded at our expense in the face of lesser difficulties.

However, this line that he was willing to take the hit on his losses and walk array was bull-crap. Any effort by him to divest himself of his humongous lump of Anglo shares held on foot of CFD’s would have collapsed the share price leaving him nursing a loss for the full amount.

Don’t forget that apart from the losses taken by his family which may be on foot of illegal contracts, he also off-loaded a huge portion of his problem onto Anglo which they tried to get other borrowers to take on.

C. Contempt of Court

Let’s be clear here. The main problem the Court has is not that Sean Quinn and co have sought to protect their assets but rather that they did so after the Court ordered that the assets must be protected for Creditors. The Court believes (and nobody other than the Quinns disagee after the Daily Mail videos) that the Quinns acted against a direct order of the High Court. We have rules called laws and we have independent Courts who we go to if we disagree on what should happen according to the rules. (This is what the Quinn family are doing in saying the loans made to them to buy shares were illegal - I think they are right on that score). The Court has seen that the Quinns have decided they are above the law of the land.

The Quinns have said (i) that they put their scheme in place before the injunctions and (ii) that their scheme has somehow backfired and they have been duped of the cash. The Court is saying in relation to (i) that it has been proved beyond a reasonable doubt that they did not do it before the injunction was in. In relation to (ii) Judge Dunne has further said that she does not believe the cash is beyond their reach. This seems to be based on the fact that (a) the Quinns are not that stupid, (b) the Quinn story does not add up (i.e., they are still lying about what happened), and (c) even if it is true, it is their actions in contempt of court that have put the assets at risk and beyond their reach – it is their illegal actions that have brought them to this situation so they should bear the punishment the same as if the assets were within their reach and they refused.

So, the answer to John Waters is that the Quinns have been brought to this sorry situation as a result of three serious sins – they sinned morally and legally against consumers in Quinn direct, they sinned morally against the population in destabilising the banking system through under-the counter deals they could not finance, and they sinned morally and legally against the taxpayers and the state and the rule of law by seeking to asset strip and take monies which they were not entitled to out of companies which should have had their assets applied to debts.

What else could they have done wrong that they didn’t do wrong?

[BTW - I do not include the wider family in "the Quinns" - just the three found guilty of cotempt - the others may be down as receiving wages but who knows if they ever actually got them.]

Very nice recap.

Coles2 · **Posted:** Mon Jul 30, 2012 8:00 am

Great post NC.

Homeboy · **Joined:** Jun 5, 2008 **Posts:** 1410

Negative Covenant wrote:

So, the answer to John Waters is that the Quinns have been brought to this sorry situation as a result of three serious sins – they sinned morally and legally against consumers in Quinn direct, they sinned morally against the population in destabilising the banking system through under-the counter deals they could not finance, and they sinned morally and legally against the taxpayers and the state and the rule of law by seeking to asset strip and take monies which they were not entitled to out of companies which should have had their assets applied to debts.

Come on now, even Fr Brian D'arcy loves the sinners.........

DSE3Br · **Joined:** Feb 24, 2008 **Posts:** 1328

Quinn's saying that his bad investment didn't bring down Anglo. Is anyone saying that it did? Quinn's bad investment brought down Quinn, but it's largely inconsequential to Anglo's situation. They were done for regardless.

http://www.independent.ie/business/iris ... 82953.html

johnnyone234 · **Posted:** Mon Jul 30, 2012 11:54 am

And not many days later, the younger son gathered everything together and went on a journey into a distant country, and there he squandered his estate with loose living. Luke 15:13

Thing Fish · **Posted:** Mon Jul 30, 2012 7:53 pm

worth repeating from january, the NYT article on De Maighteay Quinn

http://www.nytimes.com/2012/01/08/busin ... wanted=all

Quote:

A few months later, a firebomb destroyed a BMW that belonged to the new chief executive of the Quinn Group appointed by the bank. In December, a truck rammed through the company’s canteen.

roc · **Joined:** Aug 22, 2008 **Posts:** 2855

Yes good post, nc. I retract my previous openness to seeing the two sides of the coin.

Negative Covenant · **Joined:** Mar 4, 2009 **Posts:** 1049

John Waters is one of my favourite Irish commentators even if I don't always agree with him. There are certainly two sides to this story and SQ & Co. did do a lot of good work prior to their move into insurance (I don't know if SQ jr or PD Quinn can take any credit for that work as it would appear to have taken place before their time).

However, anybody who thinks they can give the Irish Courts the two fingers and then get around them with a rally in Ballyconnell is delusional. The Ballyconnell rally will backfire imho. The Courts will not like the lack of repentance or the suggestion that they might be swayed by a show of political strength. Whatever about the rest of the family, I cannot see the Supreme Court giving SQ sr, SQ jr or PQ an inch after PQ being caught on camera followed by SQ singing Petey's praises for the actions he took in public.

By the way, did SQ's praise of PDQ remind anyone of Avon reachiing out to D'Angelo?

Thing Fish · **Posted:** Mon Jul 30, 2012 9:12 pm

from the pin , aug 2008

quinn group stops financial regulumator from doing audit
viewtopic.php?f=19&t=12955&hilit=regulator+quinn+escorted

also from dec 2008 (post seanie resignation from anglo), the good ole days of 2008
viewtopic.php?f=19&t=16874&hilit=regulator+quinn+escorted

edit, max makes a point of many businesses going to wall because of poor insurance cover from the boyos from Ceavan. How many jobs were lost because of the cowboys?

edit

if Quinn had liabilities of Eur 1.6bn , how was he able to get 500 odd million to cover his CFD position? he takes a third of the money coming in to cover anglo, and somehow beleives that he should remain in charge?

The Quinn Collapse

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