Court postpones decision on Quinn

Quinn Insurance employs 600 people in County Fermanagh

The hearing into whether Quinn Insurance should be put into permanent administration has been postponed for one week.

The Republic's Financial Regulator said it had received new information from the company which warranted further consideration.

A judge at Dublin's High Court said the matter was serious and urgent.

The firm says it needs around 150 million euro to meet the solvency level requested by the financial regulator.

The High Court put Quinn Insurance into administration for breaching solvency rules last month and it was ordered not to write any new UK business.

The two elements of the Quinn Group affected by the court order are Quinn Healthcare and Quinn Direct, which offers motor, home and business policies.

Quinn Healthcare provides cover for around 400,000 in Ireland, while Quinn Direct has 1m policy-holders in Ireland and the UK.

John Hennessy, senior counsel for the regulator, said officials had received a lengthy affidavit from the company this morning.

"While it does not appear to go in substance into several of the very serious concerns of the regulator in this matter, it nevertheless merits careful consideration by the regulator and a response," the lawyer said.

In a statement, the Quinn Group said it welcomed the adjournment.

"We are hopeful that this will provide time to progress meaningful discussions towards an overall resolution.

"Notwithstanding recent issues, we believe the underlying Insurance business is profitable and that the operational model is robust and hope it is allowed to continue under whatever solution emerges.

"In particular we would urge the reopening of business in the UK as a matter of urgency in order to ensure sustainable future employment."

Talks between the Anglo Irish Bank, to which the Quinn family owe almost 3bn euros, and the Irish financial regulator continued over the weekend.

Sean Quinn has rejected a plan by Anglo Irish to invest 700m euros in the group.

Mr Quinn said the Quinn Group has 'plenty of money' and it does not need a cash injection.

Obstacles

If the Anglo Irish Bank plan was agreed it would become the majority shareholder in the Quinn Group.

It would see 150m euros injected into Quinn Insurance and 550m euros would be used to pay off bondholders.

It is understood the plan faces significant obstacles. The Financial Regulator, Matthew Elderfield, has concerns and the deal would also have to be approved by the European Commission.

Over the past week, Quinn employees and politicians have put pressure on Mr Elderfield to overturn both the administration and the ban on undertaking new business in the UK.

The Irish Prime Minister, Brian Cowen, has said the independence of his country's regulator must "be respected" in the search for a Quinn Insurance resolution.

Rallies in support of the employees at Quinn Insurance took place in Cavan and Enniskillen last week. Workers fear 1000s of jobs could be at risk if Mr Quinn loses control of his insurance business.

"Sustainable"

The company insists that its insurance business is sustainable in the long-term but it shares with the other parts of the Quinn Group the burden of approximately 1.2bn euros of debt - a separate debt from that which the family owes.

Because of the downturn, the servicing of that 1.2bn euros debt relies on healthy revenue streams from the insurance business which Mr Quinn insists remains a cash cow.

Sean Quinn has projected profit of between 400m and 500m euros for the group as a whole over the next three years and said that the retention of the insurance business is key to that projection.

In short, if the insurance business is sold off, then the other parts of the group lose their lifeline and will also be in trouble.