Sean Quinn - the Truth - Easy to Understand Version

interesting to know

Reposting here - because I have been told it is in the wrong forum - so mods please delete this same post in the consumer section.

Whether you have an interest or not, Sean Quinn former business magnate and billionaire has been making the media headlines constantly over the past number of years.
The most recent headline – has been the rally and show of solidarity for Quinn and his supposedly beleaguered family.
However, the key question is, do these people really understand what they are supporting?
I will attempt to explain the downfall of Sean Quinn, without sounding condescending in layman terms, so joe public can make an informed decision.
The purpose of this article is to provide the FACTS only.
(1) Long before the banking crisis. In 2002 Sean Quinn signed over the majority of his assets (including companies Quinn Insurance, packaging, glass and cement) to his five children (to be divided equally among them).Whilst remaining an incredibly wealthly man, the “cash cow” highly profitable companies were under control of his children.
(2) Sean Quinn is not the victim of Anglo Irish “toxic” Bank blowing all his investment wrecklessly on crazy lending during the boom without him knowing.
(3) Mr. Quinn in 2006 only owned a small share of Anglo Irish Bank.
(4) Where things went badly wrong was when Sean Quinn entered into a highly risky bets called “contracts for difference”. Without boring you with the financial terms, it quite simply means that two parties place a wager against each other. One bets that the share price will rise of a company will rise by a certain date, the other person bets it will fall.
(5) Mr Quinn bet the price of Anglo Irish bank would rise, however as we all know the construction industry collapsed and Anglo’s share price quickly followed (quite simply because all the money it lent was into to the construction industry).
(6) Now the key thing of contracts for difference is that you don’t simply lose your initial bet. You are liable for the entire difference in share price, whether is rises or falls.
(7) For example. I place a stake that Facebook’s share will increase (go long) by a certain date. Another guys reckons it will fall (go short) by the same date. We quite simply place your bet. So I put my stake down (usually 20% of the current share price x by the number of shares I want. So I want 10 facebook shares. They are currently trading at £50 each. So that is £500 worth of share and I need to put up 20% of this, which is £100. The other guy does the same. Facebook’s shares take a big tumble and are trading at £25 per share now. This is really bad because it means that I owe the other guy the difference between the original share price and the price the shares are when then the contract for difference is up. This means I owe the other guy 10 x £25 – my original stake of £100= which means I owe the other guy £150.
(8) Sean Quinn made this same bet with another guy on Anglo only on a much bigger scale. So you recognise the amount he owes to the other party. Anglo share price was trading at a high over €10 a share. They now are worthless.
(9) The guy he made the contract for difference with is unknown.
(10) Now this is the really juicy bit. Once the share price collapsed. Mr. Quinn could have went bankrupt because quite simply he didn’t have enough money to cover his losses.
(11) But he chose not too for some really strange reason. He thought he could fix things. So he decided to buy these shares that he bet on previously (28% of Anglo in total) which would hopefully raise the price of the shares and recover some of his losses. However, as we know this was very poor advice he received as the construction industry was no way about to recover. But the key thing here is as we know from earlier Mr.Quinn did not have the wealth himself to purchase the share as remember he signed over all his companies to children in earlier years.
(12) He somehow convinced Anglo to loan him money to buy Anglo’s own shares which is completely illegal under company law.
(13) Realising the share price was not going to recover, he knew he had to offload the shares, but also realised that he couldn’t offloaded all of this shares all at once because speculators know when large amount of shares come under to the market all once that the company is in trouble.
(14) So he sold his shares to the following
(15) 15% of Anglo went to the Quinn family and children and the other 10% went to the maple ten, investors and friends of Sean Quinn.
(16) However, what he did was pretty much transfer the debt (that he owed Anglo from the loan he took from them to buy this share and from himself) to his children and friends and the Quinn companies which were pretty much debt free up and until now.
(17) With the downturn, the Quinn businesses such as cement and packaging were not performing as well as they were previously. The loan payments were due and the only Quinn company that could make payment was the insurance business.
(18) The family took €200 milllion from the insurance business to service the repayments for the anglo loan. However, this money was essentially from the insurance reserve, money kept in reserve to pay out claims on car accidents etc. The insurance regulator quickly recognised that if Quinn Insurance got an influx of large claims all once it didn’t have the money to pay them and stepped in and took control of the insurance arm.
(19) It meant that the Quinn family were left to service the anglo debt but were no longer in control of the cash cow insurance arm. Without this insurance company the Quinn family didn’t have a chance of repaying the anglo loans. And the rest is history. So when the Quinn family defaulted on the loan repayments Anglo took control of the remaining Quinn companies in an effort to recoup their losses
(20) The Quinns quickly moved to put their international assets, namely a Russian hotel among other outside of the control of Anglo, in a web of complex companies.


Points to Note.
You as the taxpayer have bailed out the banks. Now the banks are trying to repay back to the taxpayer these monies through clawing back as much as possible from the sale of assets from developers and other it has loaned money originally.Anglo is doing the same with Sean Quinn and is obviously is trying to claim back more money.

Quite simply, the less assets Anglo can recover the more the taxpayer has to fork out.

So by hiding assets in complex transactions, the Quinn family is costing the taxpayer more money. They are also disputing the legality of the money Anglo lent Sean originally to buy the shares. However, if the shares had have increased instead of dropped, they wouldn’t be disputing the legality of the loans.

So the question has to be asked, will you rally to support Sean Quinn and family knowing they are hitting your back pocket as they hid assets?

Why didn’t Sean Quinn go bankrupt instead of asking his children’s companies to take over his debt. If he went bankrupt before transferring the debt (the worthless shares) to his children and their companies, the Quinn Family would still be in control on the Quinn Group as the children did not owe the debt to Anglo, Sean did.

dudara

Closing as this is a duplicate thread.

dudara