November 11, 2011
Once Ireland’s richest man with a personal fortune of $6 billion, Sean Quinn applied for voluntary bankruptcy in Belfast this morning. Quinn owed an alleged $3.85 billion to Anglo Irish Bank’s successor institution, the Irish Bank Resolution Corporation, which he simply couldn’t repay.
The entrepreneur, once one of Ireland’s most admired businessmen, started out in the early 1970s selling sand and gravel from a quarry on his father’s farm. He eventually built his Quinn Group into a multi-billion dollar mining, manufacturing, real estate and insurance empire.
But it all began to unravel in 2008 with the outbreak of the global financial crisis. At the height of Ireland’s real estate boom Quinn had bought shares of Anglo Irish Bank with risky financial instruments known as contracts for difference that allowed him to amass an apparent 25% stake in the bank, using borrowed money from Anglo. When the property market collapsed, the shares plummeted, becoming worthless when the bank was nationalized in 2009.
Unable to pay his hefty debts to the bank, Quinn was forced to turn over his Quinn Group, itself indebted to Anglo to the tune of $1.85 billion, to the bank in April 2011. At that time, Anglo released a statement stating simply that it was “owed an enormous amount of money by Sean Quinn and his family which they are not in a position to repay. The security on these loans is the family’s equity in the Quinn Group.”
Though Quinn’s personal bankruptcy announcement was made with “great sadness and regret,” he acknowledged that the measure was his only remaining option. In a statement released this morning, Quinn conceded: “I cannot now pay those loans which are due, following Anglo taking control of the Quinn Group of companies, which I and a loyal team spent a lifetime building, I find myself left with no other alternative.” Quinn also accepted a certain amount of responsibility for the current state of affairs, saying that “I am certainly not without blame.”
Quinn, however, contends that “The vast majority of debt that Anglo maintains is owed is strenuously disputed.” The Quinn family already has lawsuits pending against Anglo charging the bank with everything from “breach of duty” to “intentional and/or negligent infliction of economic damage.” What’s more, Quinn alleges that Anglo and the bank’s new owner, the Irish Government, “are intent on making scapegoats of my family and I,” claiming that Anglo “has consistently ignored its own wrongdoing in affairs.”
Quinn goes on to accuse the bank and the Irish government of purposefully undermining the Quinn Group since Anglo assumed ownership of the firm and deflecting the blame for the company’s downfall: “The Quinn companies did not fail; notwithstanding the untruths, creative accounting and spin now being generated. Anglo is now tirelessly working with its PR advisors to tell a different story of how I supposedly brought down the Quinn Group. This is wrong. Anglo’s actions, in taking control of the businesses, have led to the present situation.”
The controversy surrounding Quinn’s bankruptcy declaration doesn’t end there. A native of County Fermanagh in Northern Ireland, he declared bankruptcy in the North, citing Fermanagh as his current home and place of business. The Irish Bank Resolution Corporation, however, has already launched an investigation with the objective of “examining the validity” of Quinn’s bankruptcy application.
The bank released a statement this morning claiming that Quinn actually lives in County Cavan, on the Irish side of the border, citing Quinn’s “extensive business interests and liabilities within the State.” The effective difference for Quinn is an additional 11 years of exile from the business world. In the Republic of Ireland one must wait 12 years before taking out a loan or establishing a business after declaring bankruptcy. In the UK the waiting period is just 12 months.
Quinn’s lawyer, John Gordon of Napier and Sons, defended his client, saying “Sean Quinn paid his taxes to the UK government, he has a national insurance number in the UK, all of his tax returns in the last 38 years have been in the UK, and crucially he ran his business empire from Derrylin.” In other words, Quinn’s case belongs north of the border.
At his fortune’s peak, Sean Quinn was ranked the 164th wealthiest man on the planet in Forbes’ annual ranking of the world’s billionaires. Now he may best be remembered as the biggest individual loser of the 2008 global financial meltdown.
Once Ireland’s richest man with a personal fortune of $6 billion, Sean Quinn applied for voluntary bankruptcy in Belfast this morning. Quinn owed an alleged $3.85 billion to Anglo Irish Bank’s successor institution, the Irish Bank Resolution Corporation, which he simply couldn’t repay.
The entrepreneur, once one of Ireland’s most admired businessmen, started out in the early 1970s selling sand and gravel from a quarry on his father’s farm. He eventually built his Quinn Group into a multi-billion dollar mining, manufacturing, real estate and insurance empire.
But it all began to unravel in 2008 with the outbreak of the global financial crisis. At the height of Ireland’s real estate boom Quinn had bought shares of Anglo Irish Bank with risky financial instruments known as contracts for difference that allowed him to amass an apparent 25% stake in the bank, using borrowed money from Anglo. When the property market collapsed, the shares plummeted, becoming worthless when the bank was nationalized in 2009.
Unable to pay his hefty debts to the bank, Quinn was forced to turn over his Quinn Group, itself indebted to Anglo to the tune of $1.85 billion, to the bank in April 2011. At that time, Anglo released a statement stating simply that it was “owed an enormous amount of money by Sean Quinn and his family which they are not in a position to repay. The security on these loans is the family’s equity in the Quinn Group.”
Though Quinn’s personal bankruptcy announcement was made with “great sadness and regret,” he acknowledged that the measure was his only remaining option. In a statement released this morning, Quinn conceded: “I cannot now pay those loans which are due, following Anglo taking control of the Quinn Group of companies, which I and a loyal team spent a lifetime building, I find myself left with no other alternative.” Quinn also accepted a certain amount of responsibility for the current state of affairs, saying that “I am certainly not without blame.”
Quinn, however, contends that “The vast majority of debt that Anglo maintains is owed is strenuously disputed.” The Quinn family already has lawsuits pending against Anglo charging the bank with everything from “breach of duty” to “intentional and/or negligent infliction of economic damage.” What’s more, Quinn alleges that Anglo and the bank’s new owner, the Irish Government, “are intent on making scapegoats of my family and I,” claiming that Anglo “has consistently ignored its own wrongdoing in affairs.”
Quinn goes on to accuse the bank and the Irish government of purposefully undermining the Quinn Group since Anglo assumed ownership of the firm and deflecting the blame for the company’s downfall: “The Quinn companies did not fail; notwithstanding the untruths, creative accounting and spin now being generated. Anglo is now tirelessly working with its PR advisors to tell a different story of how I supposedly brought down the Quinn Group. This is wrong. Anglo’s actions, in taking control of the businesses, have led to the present situation.”
The controversy surrounding Quinn’s bankruptcy declaration doesn’t end there. A native of County Fermanagh in Northern Ireland, he declared bankruptcy in the North, citing Fermanagh as his current home and place of business. The Irish Bank Resolution Corporation, however, has already launched an investigation with the objective of “examining the validity” of Quinn’s bankruptcy application.
The bank released a statement this morning claiming that Quinn actually lives in County Cavan, on the Irish side of the border, citing Quinn’s “extensive business interests and liabilities within the State.” The effective difference for Quinn is an additional 11 years of exile from the business world. In the Republic of Ireland one must wait 12 years before taking out a loan or establishing a business after declaring bankruptcy. In the UK the waiting period is just 12 months.
Quinn’s lawyer, John Gordon of Napier and Sons, defended his client, saying “Sean Quinn paid his taxes to the UK government, he has a national insurance number in the UK, all of his tax returns in the last 38 years have been in the UK, and crucially he ran his business empire from Derrylin.” In other words, Quinn’s case belongs north of the border.
At his fortune’s peak, Sean Quinn was ranked the 164th wealthiest man on the planet in Forbes’ annual ranking of the world’s billionaires. Now he may best be remembered as the biggest individual loser of the 2008 global financial meltdown.
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