Business World

Wednesday 18 October 2017

US court hears new submission in Flynn case against IBRC

John Mulligan

John Mulligan

Recognising Irish Bank Resolution Corporation's liquidation in Ireland for the purpose of granting it bankruptcy protection in the United States would be "manifestly contrary" to the rights of US citizens and a host of the country's public policy interests, lawyers for US-based Irish developer John Flynn have argued.

Mr Flynn's lawyers, seeking to prevent IBRC being granted the bankruptcy protection, told a Delaware court in documents filed on Tuesday that the direction of IBRC's liquidation was "completely unknown in advance" and that Mr Flynn and others risk being "deprived of their right to due process".

The submission to the court was made following hearings last week in the US, where lawyers for IBRC, formerly Anglo Irish Bank, urged a judge to offer the institution bankruptcy protection there.

Mr Flynn, who is also a US citizen, and two US firms owned by Switzerland-based Irish developer John McCann – Castleway and Walnut-Rittenhouse – have sought to prevent IBRC being granted court protection in the United States.

HEARINGS

Following last week's hearings, the judge presiding over the case, Christopher Sontchi, asked both side to submit so-called proposed findings of fact and conclusions of law as he makes his deliberations.

Those documents were submitted on Tuesday evening in the US and the judge has said he will make a quick ruling on the case due to its nature.

Mr Flynn's lawyers have insisted that the special liquidation of IBRC in Ireland is not a court proceeding.

"It is a statutory regime designed and implemented by the Irish State, largely controlled by the Irish State and exclusively for the benefit of the Irish State," they said.

"Recognition of the Irish proceeding is manifestly contrary to a host of US public policy interests relating to due process, discrimination against US creditors, unfair proceedings and denial of contractual and property rights of US citizens," they added, urging the court to reject the recognition of the liquidation proceedings in Ireland.

ENTITLED

But lawyers for IBRC have insisted the bank is entitled to have its liquidation proceedings in Ireland recognised in the US for the purpose of granting bankruptcy protection.

They said in their documents filed on Tuesday that "all mandatory elements of a foreign main proceeding are present" and that no "manifestly contrary" public policy of the United States is implicated.

They insisted that Mr Flynn and other objectors to the bankruptcy petition had "failed to even identify any supposed conflict between the applicable Irish statutes and US law".

Mr Flynn has been granted a stay by the US court preventing IBRC selling loans attached to the Blackrock and Galway clinics, in which he is a shareholder, until a ruling on the bankruptcy application has been made.

Separately, Mr Flynn is suing IBRC in New York in an action related to alleged overcharging by the bank.

Mr McCann's firms are also fighting a decision by IBRC and NAMA not to release security on properties so that they can repay loans totalling $60m (€45m).

Irish Independent

Also in Business