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Ireland's one-time richest person declared bankrupt, owes state-owned bank euro2.1 billion
DUBLIN (AP) ' A famed entrepreneur who was once rated Ireland's richest person was declared bankrupt on Monday in a Dublin court as a bank pursues him for debts exceeding euro2.1 billion ($2.7 billion).
Lawyers for tycoon Sean Quinn withdrew his opposition to a bankruptcy order sought by the former Anglo Irish Bank, the reckless lender at the center of Ireland's calamitous property crash.
The bankruptcy will force a thorough investigation of Quinn's finances, which the bank hopes will reveal capital and assets that it can reclaim from Quinn, his wife and five children.
Quinn had a reported 2007 net worth of euro4.7 billion ($6 billion) but sank much of his fortune into Anglo shortly before the bank ' the most aggressive lender to Ireland's construction barons ' suffered crippling losses as the country's decade-long property bubble burst.
The Quinn family in 2008 secretly built up to a 28 percent stake in Anglo shares using an ill-regulated financial instrument that hid the scale of their investment from other stockholders. As Anglo's share price plunged, the bank allegedly encouraged Quinn and his relatives to borrow hundreds of millions specifically to buy more Anglo stock.
Ireland nationalized Anglo in 2009 to prevent its collapse, wiping out a Quinn family investment estimated at euro2.8 billion. The government last year renamed Anglo as the Irish Bank Resolution Corp., or IBRC. Its bailout is expected to cost taxpayers euro29 billion, a bill so great it overwhelmed Ireland's finances and forced the government last year to negotiate a humiliating loan pact with the European Union and International Monetary Fund.
Quinn, 64, was not in Ireland's Commercial Court to hear Monday's judgment by Justice Elizabeth Dunne. She told lawyer Gavin Simons that Quinn would have to provide documents showing how much he's worth today.
Last week Quinn lost a Belfast legal battle to gain bankruptcy protection in the neighboring British territory of Northern Ireland. The judge there ruled that Quinn had misled an earlier Belfast judge that his main base of business was in Northern Ireland, rather than the Republic of Ireland.
"I never done a day's work from southern Ireland in my life," Quinn insisted to reporters outside the Belfast court last week.
Dublin-based IBRC would have faced greater difficulty pursuing Quinn for debts in Northern Ireland. Quinn also could have returned to business within a year under UK bankruptcy law, whereas the Irish prevent bankrupts from holding company directorships for up to 12 years.
As part of his overturned Belfast bankruptcy bid, Quinn in November testified he had less than euro11,000 ($15,000) in cash in three bank accounts to pay off IBRC debt demands of euro2.16 billion ($2.75 billion).
The Quinns and IBRC are locked in several legal battles stretching from the British Virgin Islands to Cyprus over control of a commercial property empire spanning Britain, Russia, Ukraine, Turkey and India valued at more than euro700 million.
The bank accuses Quinn of fraudulently shifting ownership of his foreign properties, including office blocks and shopping malls, to relatives and shell companies that remain under the Quinns' surreptitious control. The Quinns deny these charges.
His five children have filed a Dublin lawsuit against IBRC seeking to have the bulk of the family's Anglo borrowing voided on the grounds that the bank should never have lent them the money in the first place.
Their lawsuit argues that Anglo misled them about the company's imminent danger of collapse and spurred them to commit market fraud by manipulating Anglo's share price. IBRC insists Anglo's loans to the Quinns were for much wider business reasons.
Quinn boasts one of Ireland's most famous rags-to-riches stories. He grew up on a border farm in Northern Ireland's County Fermanagh, left school barely literate at 14 and started his first construction-gravel business with a 100-pound ($150) bank loan.
Within three decades Quinn had transformed his quarry into a nationwide cement company. He built and bought luxury hotels, pubs, apartment complexes and commercial properties throughout Ireland, Britain, Eastern Europe and Asia; founded Ireland's third-largest insurance company; and took interests in glassworks, packaging and radiators.
IBRC last year seized ownership of his Irish-based Quinn Group, forced him and relatives off the board, and sold a majority stake in his insurance company to U.S. insurance company Liberty Mutual.
Irish Bank Resolution Corp., http://www.ibrc.ie/
Quinn's empire, http://www.quinn-group.com/