Dan White: State should hang tough in talks with the Quinn family
The liquidation of IBRC, the former Anglo Irish Bank, has moved much more quickly than anyone could have imagined at the time the Government decided to pull the plug on the bankrupt lender in February 2013.
Even better it now seems as if the liquidation will generate more cash than had been expected at the time, raising the welcome prospect of a windfall for the Exchequer.
But, and it's an awfully big "but", there's a catch.
Standing between the Exchequer and a potential IBRC payout are the 'vulture' investors who bought Anglo's junior bonds for cents in the euro, and the family of former cement-through-glass-to-insurance billionaire Sean Quinn Snr.
The vultures are hoping to use the fact that the IBRC liquidation generated more cash than expected to force the liquidator to repay the full face value of the Anglo bonds rather than the heavily-discounted price at which they bought them.
Meanwhile the Quinn family are attempting to use the better-than-expected outcome of the liquidation as leverage in their legal action against Anglo.
The gist of the Quinn family's case is that Anglo acted illegally when lending various Quinn companies in excess of €2.4bn. This, the family argues, removes the responsibility to repay those loans.
Last week the case suffered a severe setback when the Supreme Court ruled that the Quinn family could not rely on any illegality by Anglo as part of its case.
However, this reverse hasn't stopped the Quinn family from continuing to pursue its case against Anglo.
While last week's Supreme Court ruling has knocked out the main plank of the case the Quinn family retain a certain nuisance value - this is because the liquidation process can't be wrapped up and the surplus cash paid out to creditors until all outstanding legal cases have been concluded.
So, despite the recent Supreme Court defeat, should the State cut a deal with the Quinn family and hand over some cash to settle the case in order to speed up a possible €1.1bn payout to the Exchequer?
Over our dead bodies. While doing a deal with the Quinn family might have made some sort of sense a few years back, when the country was broke and the Exchequer was scratching around for every cent, things are very different now.
Irish ten-year bond yields are now less than 1pc, down from a 2012 high of almost 15pc.
This means that, far from needing to grab a readily available €1.1bn - even if it meant paying the Quinn family handsomely to drop their case - the State can borrow the money for virtually nothing instead.
So with the Exchequer able to borrow as much money as it wants at record low interest rates and the Supreme Court decision having apparently holed the Quinn family's case against Anglo below the waterline, the State holds all of the cards. When interest rates are as low as they now are for Irish government bonds the time value of money (basically the value of a euro tomorrow versus that of a euro today) has shrunk to virtually nothing.
This means that it costs the Exchequer virtually nothing if the State chooses to stand its ground in the Quinn case.
Which is exactly what it should do. No-one forced Sean Quinn Snr to borrow €2.4bn from Anglo. He was a canny, sophisticated businessman who knew exactly what he was doing. He was well aware of the risks he was running. If things had gone according to plan would he have handed his profits over to Anglo? Would he what?
But, then when things don't go according to plan he expects the taxpayer to pick up the tab. Pull the other one!
When Sean Quinn Snr was in his pomp media profiles of the great man regularly mentioned his weekly card games - for supposedly small stakes - with his friends.
Quinn Snr and his family are now playing for much higher stakes with the taxpayer on the hook if they win. This must not be allowed to happen.
The State should be absolutely ruthless in calling the Quinns' bluff in this high-stakes poker game.