Sean Quinn files for personal bankruptcy declaring his inability to pay back to Anglo-Irish Bank

Sean Quinn of Quinn Group of Companies filed for bankruptcy in personal capacity earlier on Friday, November 11. If his application is accepted in Irish court of law, Quinn will be first billionaire to declare for personal insolvency in the aftermaths of
2008 financial ordeal.

Once the richest businessman in the Republic of Ireland, took some blunt decision prior to financial meltdown that had drastic repercussion after the fallout of major financial institutes in 2008 and 2009.

Quinn owned the Quinn Group of Companies, majoring in construction material, real estate, mining and insurance. However, the financial crisis took its toll on the real estate business bad and QGC fell victim to the roll over.

A statement issued by Quinn’s attorney said that the simple reason for filing of bankruptcy is Quinn’s incapability to pay back a loan of $3.85 Billion to Anglo-Irish Bank’s subsidiary, Irish Bank Resolution Corporation (IBRC).

Quinn purchased IBRC’s risky but beneficial-at-the-time financial instruments called contracts in 2008 with loaned money from the parent bank. However, when IBRC went down along with Anglo-Irish Bank, the contracts became worthless.

After AIB’s take over by Irish government in 2009, Quinn was simply not capable of making money to return back the loan because the real estate bubble burst. Quinn Group itself is indebted to Anglo-Irish in a tune of $1.85 Billion.

However, Irish authorities are raising objections in reference to a suspicion of Quinn’s personal property and its location. After declaring default, a businessman is not allowed to borrow money for a period of 11 years in Ireland. However, in the UK, it
is mere 12 months.

Quinn lives just south of the UK-Irish border and for the last 37 years his tax returns have been registered in the UK for QGC’s presence in England. Irish government is suspecting the bankruptcy as Quinn’s escape strategy to commence business in the UK.

However, the fight is not one sided as Quinn is accusing the Irish government and AIB for impotent decision they have made in the recent history and the powerlessness of the bank to survive the 2008 crisis that led to his current personal and professional
status.

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Posted by Usman Khalid on Nov 12 2011. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry