Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 41: To ask the Minister for Finance the extent of his or any other Department or agency's consideration of the Quinn Group proposals, recently presented, for the future of Quinn Insurance Ltd in administration; if any consideration was given to the likely negative impact on trading of the Quinn Group manufacturing concerns following on from the removal of the Quinn family members and the Senior managers from their employment; and if he will make a statement on the matter. [9661/11]

Michael Noonan (Limerick City, Fine Gael)
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The Joint Administrators announced last week the acquisition by Liberty Mutual Direct Insurance Company Ltd (LMDI), a joint venture between Liberty Mutual (LM) and Anglo Irish Bank, of certain assets and liabilities of Quinn Insurance Limited (in administration) (QIL). They see this as the best option for the policy holders of QIL. A twelve to fourteen week transition process will now commence, during which time LMDI will obtain all the necessary regulatory consents from parties, including the Central Bank. At the outset, it should be noted that, under the sales process of QIL, neither I as Minister for Finance, nor the Government, had any role in assessing the Quinn Group proposals recently presented for the future of Quinn Insurance Ltd (QIL) in administration, as this was a matter solely for the Joint Administrators, who were appointed by the High Court. Deputies will be aware that this sales process was conducted by MacQuarie Group on behalf of the administrators.

The Joint Administrators have indicated to my Department that the Quinn proposal was only received recently, several months after the closing date for submission of interest. They say that the proposal was highly conditional in nature as it depended on amongst other things on the State intervening to facilitate the transfer of €2.8bn of debt from Anglo to one of the viable banks and to require that bank to provide a further €500m loan to the Quinn Group, as well as agreement with the bondholders. As such they saw no likelihood for such a proposal being facilitated in the current economic climate, as the taking on of such loans by other banks was likely to compound their already difficult position and in addition would also be likely to contravene European State Aid rules. They were also of the view that reaching agreement with the bondholders in relation to the releasing of the guarantees over QIL assets was going to be extremely difficult if not close to impossible.

The decision in relation to the appointment of the Share Receiver by Anglo is very much a commercial one and I in my role as Minister for Finance had no input into this matter. While I understand the concern being raised on whether this decision will have a negative impact on the trading of the Quinn manufacturing group following the removal of the Quinn family members and the senior managers from their employment, I am informed that other scenarios might well have prompted court action to put the Group into receivership with the potential for immediate significant job losses. By comparison the appointment of a Share Receiver gives the Group grounds for considerable hope of a viable future. This viable future however depends to a large degree on the willingness by everybody, particularly those engaged in several recent negative events, to engage wholeheartedly with the new ownership arrangements, because if this does not materialise then over time this is likely to negatively impact on the trading performance of the Group.

Overall, I share the view that the recent steps taken to sell the QIL business to LMDI and to appoint a share receiver to the wider group as being positive and will do a lot to protect jobs in the border region – the protection of which is important for the state and for the local economies in these communities. The proposal put forward by the Quinn Group was not in the economic or financial interests of the state.