Drumm's $1.5m bill spurred Dunne's bankruptcy u-turn
Published 24/08/2014 | 02:30
A massive $1.5m legal bill run up by former Anglo Irish Bank chief David Drumm in the course of his four-year US bankruptcy fight figured prominently in Sean Dunne's decision to withdraw his own application for bankruptcy in Connecticut, the Sunday Independent has learned.
While news of the Carlow-born developer's move has taken many observers by surprise, a source familiar with the matter said Mr Dunne had made a "purely commercial decision" on the matter after considering the significant expense involved in continuing to fight his two biggest creditors, Nama and the Ulster Bank, in courts on both sides of the Atlantic.
"As far as Sean is concerned, there is no sense in it. While his financial resources are finite, Nama and the Ulster Bank have deep pockets. Nama can pump money into pursuing him in America for an eternity thanks to the war chest it has courtesy of the Irish taxpayer," the source said. Leaving aside the massive costs involved in persisting with his US bankruptcy, the Sunday Independent understands Mr Dunne concluded that even if he prevailed in the US courts against Nama and the Ulster Bank's objection to his discharge from bankruptcy there, it would have no impact on his status as a bankrupt here in Ireland.
Commenting on the developer's Irish bankruptcy, the same source said: "Even a win in the US would have absolutely no effect as Ulster Bank and any other of Sean's creditors will still have three years to object to his discharge from bankruptcy in Ireland. So it can't be seen as any kind of a cop out for him."
In a formal motion to dismiss Mr Dunne's case for Chapter 7 bankruptcy, the developer's US attorney, James Berman said that the court's dismissal of the application would serve the interests of "judicial economy" and save all parties in the case "needless expense" as they would no longer need to have legal representation in two countries.
In calling for the case to be dismissed, Mr Berman pointed to the argument submitted in a filing to the court by lawyers for the Ulster Bank on May 28, 2013, in which they suggested that such a move "might be appropriate" were Mr Dunne to be declared bankrupt in Ireland where all his creditors and assets were located.
In the event, Mr Dunne was adjudged a bankrupt by the High Court in Dublin just two months later on foot of an application by the Ulster Bank. Mr Berman noted how both bankruptcy proceedings were addressing the same issues, and that the matters being dealt with by the courts in Connecticut and in Dublin were "primarily, if not exclusively, controlled by Irish law".
Referring to Mr Dunne's financial capacity, he said: "The debtor [Mr Dunne] does not have the resources to defend the objection to discharge. Further, the debtor cannot be assured there would be no efforts in Ireland or by Irish creditors to undermine the discharge."