independent

Thursday 17 April 2014

Dunne's lawyers appeal ruling on dual bankruptcy

Former 'Baron of Ballsbridge' asks US court to halt Ulster Bank's pursuit of proceedings here

Sean Dunne
Sean Dunne

FORMER 'Baron of Ballsbridge' Sean Dunne's battle to be declared bankrupt in America – in the face of stiff opposition from Ulster Bank – has taken yet another twist following a fresh appeal late last Friday evening by the developer to the courts in Connecticut.

Lawyers for the Carlow-born businessman have filed a motion seeking to reimpose a stay which would prevent Ulster Bank from proceeding with its petition to have him declared bankrupt here in Ireland, as well as in the US.

Judge Alan Shiff had lifted the stay on June 4 last following submissions from Ulster Bank's lawyers in which they argued that Mr Dunne's US bankruptcy proceedings were interconnected with pending proceedings the bank was trying to pursue in Ireland.

Lawyers for Mr Dunne are expected to tell the court when the matter comes before it this Tuesday that in the absence of a summons having been served on him by Ulster Bank, there is no Irish bankruptcy process in train.

Commenting on the bank's attempts to bring proceedings in Ireland at a time when Mr Dunne is already going through the American bankruptcy process, the developer's lawyers claim in their filing that its motivation in seeking to have him declared bankrupt here in Ireland is "purely political" and "would adversely impact his rights, interests and liberties in numerous significant ways".

They also note how the bank had already "obtained and directly controls receiverships over all its collateral in Ireland". As such, they argue, the bank would not suffer any "financial hardship" as a result of the court granting a stay on the order which had been granted to it.

Elsewhere in the same filing, Mr Dunne's lawyers describe Ulster Bank's "claim of threatened harm and urgency" as "pure fiction".

"Ulster Bank's motivation for urgency in commencing an insolvency proceeding against the debtor (Mr Dunne) in Ireland appears then to be purely political – a factor that should not sway this court," they claim.

Referring to the developer's application to be declared bankrupt in the United States and his right to do that without having to go through a dual bankruptcy proceeding here in Ireland, Mr Dunne's lawyers insist that there is no legal authority for it.

Turning to Ulster Bank's efforts to serve a bankruptcy summons on their client in the days and weeks after he had filed for bankruptcy in Connecticut, they argue that the bank "cannot and should not be allowed" to pursue Irish insolvency proceedings without an order from the court.

In seeking to have Judge Shiff reimpose the stay, they claim that it is "essential to prevent irreparable injury" to Mr Dunne as it would force him "to defend against being adjudicated a bankrupt in Ireland at the same time that he is a debtor" in the US court system.

Mr Dunne's lawyers also note the complications that would arise were that to happen in relation to the liquidation and distribution of his assets; and to the increased costs that would have to be borne both by the developer and his creditors as a result of the "complexity and conflicts" associated with dual bankruptcy proceedings.

"That could only be fine with Nama and Ulster Bank, which apparently have endless resources for the pursuit of the debtor," they claim.

Pointing to the difficulty that would arise for Mr Dunne in complying with the rules for bankrupts in Ireland, his lawyers say: "Where it appears that the debtor is about to leave Ireland, the High Court may cause him to be arrested and brought before it for examination. This is obviously a hardship for someone who has not resided in Ireland in six years, has resided in the US for the last three years with his family and does not intend to reside in Ireland."

Irish Independent

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