Irish

Tuesday 29 July 2014

Dunne creditors have just three months to fight bankruptcy bid

Cormac McQuinn

Published 02/04/2013|04:00

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Sean Dunne pictured in New York at the weekend

BANKS, government agencies and other creditors owed a combined total of more than $500m (€389m) by bust developer Sean Dunne have just over three months to object to his bankruptcy petition in the US state of Connecticut.

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Documents filed with the bankruptcy court show that a creditors' meeting is scheduled to take place next month in the offices of the court-appointed bankruptcy trustee. The papers give notice of a July 8 deadline for "objections for discharge" of Mr Dunne's debts.

The builder himself has predicted he will be debt-free within six months under lenient US bankruptcy rules with his creditors – including state-owned banks – getting just 2pc of what he owes them.

Bankruptcies in the state of Connecticut can be discharged in as little as four months if they are not contested through the courts.

A number of Mr Dunne's major creditors among the list of more than 30 were contacted last night by the Irish Independent and asked if they would contest Mr Dunne's bankruptcy petition.

Bailed-out banks AIB and Bank of Ireland refused to comment, as did a spokeswoman for the liquidators of the Irish Bank Resolution Corporation – the former Anglo Irish Bank and Irish Nationwide.

Ulster Bank, which provided Mr Dunne with a €275m loan for the purchase of the Dublin 4 Jurys and Berkeley Court Hotel site in 2005, also declined to comment.

Mr Dunne announced his bankruptcy through an article in the 'Sunday Independent'.

He said Ulster Bank "forced me into this position" by applying to have him made bankrupt in Ireland. He said: "Unlike Jesus, I don't expect to rise again in three days, but certainly hope to make great strides within the next three years, debt free with a clean slate."

Mr Dunne filed for a Chapter 7 bankruptcy on Friday night estimating his debts at between $500m and $1bn (€778m) in his application form.

Lawyer

In another newspaper interview, Mr Dunne put the figure at $500m and said that the Bankruptcy Court and its appointed trustee, Richard Coan, would decide when he would ultimately be discharged from debts.

He said it could happen within six months and that if his assets were as high as the $10m (€7.7m) he had estimated in his bankruptcy application, his creditors could expect to get 2pc of what he owes.

Mr Dunne is represented by bankruptcy lawyer James Berman, a partner with the Zeisler & Zeisler firm in Bridgeport, Connecticut.

The Yale graduate's profile at the law firm boasts that he was named 2013 "Bankruptcy Lawyer of the Year" in the Stamford area of Connecticut by the Best Lawyers website.

Court papers show that Mr Dunne will have to undergo a Chapter 7 means test and submit a statement of financial affairs within two weeks.

Other documents show that there will be a first meeting of creditors on May 8 at 10am at the New Haven office of the bankruptcy trustee, Mr Coan.

It also notes that "objections for discharge" are due on July 8.

Mr Dunne is required to file a financial management certificate by the same date if he is to be discharged from his debts.

Bankrupts in the US must file this document to show that they have completed a financial management course approved by the bankruptcy trustee prior to their debts being cleared.

Mr Dunne is being pursued by Nama over a €184m judgment relating to his borrowings from banks bailed out by the taxpayer.

The agency has already taken legal action in Connecticut over property deals by his wife Gayle Killilea, which, it claims, she made using money originally earned by Mr Dunne, which he channelled to her. Nama claims these deals made millions for the pair while Mr Dunne's debts at home went unpaid.

A spokesman for Nama said the agency had "no comment" on the bankruptcy petition.

Irish Independent

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