Sunday 8 December 2019

Sean Dunne legal team slams officials over bankruptcy

Lawyers demand 'protocol' on how case will be handled in two states

Sean Dunne
Sean Dunne

RONALD QUINLAN Special Correspondent

LAWYERS for developer Sean Dunne have accused the US and Irish officials handling his bankruptcy of "making up the rules as they go" in relation to his case.

The claim is contained in a court motion filed by Mr Dunne's attorneys in Connecticut last week, in which they ask for his bankruptcy trustees to be ordered to produce a promised protocol setting out the terms of how dual bankruptcies in the US and Ireland will be managed. The matter is due to come before a US bankruptcy judge on May 20 next.

Referring to the alleged failure so far to provide Mr Dunne with the details of the ground rules to be followed, the developer's US attorneys state: "A protocol acceptable to the debtor that sets forth his rights and obligations is better than no protocol at all, and certainly better for the process than the trustee and assignee making up the rules for the unprecedented dual bankruptcies as they go, without any prior court approval."

Mr Dunne's lawyers also allege that he has been prejudiced by being compelled to participate in what they describe as an "unprecedented dual bankruptcy arrangement in the absence of any protocol which defines his obligations".

The one-time Baron of Ballsbridge found himself in the extraordinary position of being declared a bankrupt in both the US and Ireland in July of last year after his biggest single creditor, Ulster Bank, secured permission from the US courts to apply to have him bankrupted here, too. Mr Dunne had already filed for bankruptcy in Connecticut some four months earlier with debts of some €700m ($942m).

Commenting on the decision to grant permission four months later to the Ulster Bank to pursue so-called parallel bankruptcy proceedings, Mr Dunne's lawyers note that the US judge acceded to the bank's request with the condition that the developer's American bankruptcy trustee and the Irish official assignee agree a protocol between them.

Mr Dunne's legal team also note how a judgement in the case given in the High Court last December by Mr Justice Brian McGovern had been "centrally premised" on the agreement of that protocol.

The motion attaches a letter sent to solicitors for the official assignee, Chris Lehane, on March 28 last. "To date, the assignee has ignored the letter," the motion alleges.

Asked by the Sunday Independent for comment, Mr Lehane refused to be drawn, saying: "I do not comment on bankruptcy cases."

The official assignee's conduct in Mr Dunne's case had already come in for criticism by the developer's lawyers a number of months ago.

Last March, Mr Lehane's decision to apply for a warrant at an earlier private court hearing to search and seize items from a house owned by Mr Dunne's family at the exclusive K Club was challenged in the High Court in Dublin.

Lawyers for Mr Dunne sought orders permitting the cross-examination of Mr Lehane, claiming the decision to grant the warrant in a hearing at which only the official assignee had been represented had been legally defective and based on hearsay evidence. Mr Lehane, for his part, opposed what he contended would be a "roving" cross-examination.

In a judgement on April 10 last, Mr Justice McGovern denied Mr Dunne's application saying that it was "neither necessary nor desirable in the interests of justice". Explaining this, he said, "While the bankrupt wishes to estabish the source of the Ofiicial Assignee's information, there are good public policy reasons why he should be entitled to maintain informer privilege."

Sunday Independent

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