Friday 31 October 2014

Bankruptcy extended for Cowen’s former running mate Ger Killally due to theft conviction

Aodhan O'Faolain

Published 26/05/2014 | 18:04

Gerard Killally
Gerard Killally

THE High Court has extended the duration of former Fianna Fail politician Gerard Killally's bankruptcy by an additional 12 months.

Mr Killally, a former councillor and general election running mate of ex-Taoiseach Brian Cowen, was adjudicated bankrupt in July 2009 with debts of some €70 million.

As a result of a ruling today by Mr Justice Brian McGovern, Mr Killally will remain as a bankrupt until June 2015 because of a conviction in 2012 for stealing assets from his bankrupt estate.

Over the last number of years he has been before the courts in relation to a number of property deals conducted during the economic boom. In 2012 judgment of €9.7m was entered against him at the Commercial Court over one property deal.

At the time of his adjudication he expected to be a bankrupt for up to 12 years.

Under new insolvency laws that came into force last December, the duration of a person's bankruptcy was reduced to three years.

Mr Killally, a businessman and developer, had hoped to avail of the new law and exit bankruptcy next month.

However at the High Court today, the official in charge of the bankruptcy, Chris Lehane, sought an order postponing Mr Killally's discharge from bankruptcy for an additional 12 months.

The order was sought because Mr Killally was convicted in November 2012 at the Midland Circuit Criminal Court of stealing assets from his estate in bankruptcy.

Mr Killally was given a three-year suspended sentence for stealing €18,000 worth of refrigeration equipment from a shop he used to own.

Mr Lehane also told the court he was also had concerns about two pension plans that had not been previously disclosed to him.

Mr Killally, from Shean, Edenderry Co Offaly, represented by Vincent P. Martin, opposed the application.

Counsel said that it was their case that in seeking to extend the period of bankruptcy Mr Killally was in effect receiving "a double punishment," for his 2012 conviction.

Counsel argued that the bankruptcy process was not designed to punish persons, and questioned Mr Lehane's legal basis for seeking the postponement.

Mr Killally had pleaded guilty at the Circuit Court and had repaid the money.  He was under a lot of stress at the time. 

In his ruling, Mr Justice McGovern said he was satisfied to grant the order sought by Mr Lehane. The order sought was based on "good public policy", he said.

He welcomed the fact that insolvency laws introduced last year reduced the duration a person can spent in bankruptcy.

But, he said, it  was important for bankrupts to "adhere to the process and cooperate" with the official assignee in charge of the bankruptcy.

Bankrupts have "nobody but themselves to blame" if their application to exit bankruptcy is delayed, he said.

The judge also granted Mr Lehane an income payment order requiring Mr Killally to pay €433 per month towards his bankruptcy debts until May 2016.

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