UPDATE 2-Bankruptcy keeps Ireland's Quinn out of business

(Adds statement from Quinn, comment from insolvency expert, sale of Belfry)

By Sarah O'Connor

DUBLIN Jan 16 (Reuters) - Sean Quinn, once Ireland's richest man, has been declared bankrupt in a Dublin court, preventing his return to the corporate arena for at least five years and marking another twist in a legal battle over 2.9 billion euros ($3.7 billion debt.

Quinn, 65, who turned a rural quarrying operation on his family farm into a 4 billion euro globe-spanning empire, has come to personify the rapid unravelling of Ireland's "Celtic Tiger" economy.

His use of loans to make ill-fated investments in Anglo Irish Bank has resulted in the failed lender, recently renamed Irish Bank Resolution Corp, pursuing him in a global treasure hunt stretching from courtrooms in Belfast to the British Virgin Islands.

"Today Anglo achieved their goal of ensuring that I will never create another job," Quinn, who was not in court, said in a statement on Monday.

"The position of the Irish taxpayer could have improved significantly, by a more reasonable approach to the issues involved."

Quinn had tried to be declared insolvent in British-controlled Northern Ireland, which has a less onerous bankruptcy regime. That declaration was overturned by a court in Belfast last week after IBRC contested it.

Under Irish law, a bankrupt person is prevented from creating or managing a company in Ireland for a minimum of five years and up to 12 years. Any income earned or assets developed by the bankrupt person during that period benefit the creditors.

Under British law, a person is discharged from bankruptcy after one year, a regime that has prompted casualties of Ireland's financial crisis to go to Britain to clean up their financial affairs in a route dubbed "bankruptcy tourism".

"It really keeps Quinn on the hook for a much longer period," said Mick Leydon, a director at KavanaghFennell, a Dublin-based specialist in corporate recovery and insolvency.

"Obviously there are other logistical benefits for Anglo in that it saves them from having a second set of lawyers, a second set of insolvency practitioners involved in Northern Ireland but that is really it."

LOCAL HERO

Quinn has lost control of his empire, which spanned wind farms, cement plants and hotels in countries as diverse as India, Sweden and the Ukraine. But IBRC is fighting legal battles to gain ownership of Quinn's properties.

Ireland's High Court has assigned an official to take over all of Quinn's assets.

The father of five, who used to fly around Europe on his Falcon jet sealing property deals, has said he has lost everything and is down to his last 11,000 euros, an ageing Mercedes and 166 acres of land.

His palatial home, close to the Irish border, is owned by his children.

Britain's Belfry Hotel and golf course, which is controlled by Quinn's son Sean Jr and has hosted four Ryder Cups, was put up for sale on Monday by real estate group Jones Lang LaSalle.

"We are already seeing interest being expressed from across the globe, particularly from Asia where investors are seeking to capitalise on the relatively low British pound," said George Nicholas of Jones Lang LaSalle Hotels.

Local Irish media have reported that the consortium of banks that funded Quinn's purchase of the course for 186 million pounds in 2005 - Bank of Ireland, Barclays and Bank of Scotland - had decided to sell the indebted resort.

Quinn's wife and children are battling IBRC over the legality of the bank's loans to the family and are due to mount a court challenge to them later this year.

Quinn is still regarded as a hero for creating thousands of jobs in Cavan where locals have held rallies in recent months to show their support for him.

New executives at the Quinn Group have also been subjected to a series of attacks, including arson. Quinn has condemned the attacks, which included a fire at the Quinn Group HQ at the weekend.

Quinn Insurance business, which was put into administration in 2009, was recently bought by U.S. general insurer Liberty Mutual and its healthcare arm was sold to management last month in a tie-up with Swiss reinsurer Swiss Re. ($1 = 0.7895 euro) (Writing by Carmel Crimmins; Editing by Jane Merriman and David Cowell)