Mick Wallace has claimed the vulture fund which applied to have him adjudicated a bankrupt is "settling a score" after he raised concerns about the purchase of Nama's Northern loan portfolio, Project Eagle.
The Independent TD is considering a legal challenge to the High Court application made by a subsidiary of giant US fund Cerberus.
Cerberus bought Project Eagle for €1.6bn in April 2014, a transaction which has been mired in controversy ever since Mr Wallace alleged stg£7m linked to the deal had been "reportedly earmarked for a Northern Ireland politician or party".
His comments helped spark investigations by the UK's National Crime Agency and the US Securities and Exchange Commission.
Two months after the Dáil allegations, Mr Wallace revealed the vulture fund had bought a distressed loan his construction firm M&J Wallace had with Ulster Bank. It had been purchased in December 2014 when Cerberus acquired the bank’s Project Aran portfolio.
Cerberus subsidiary Promontoria (Aran) Ltd subsequently secured a €2m judgment against the Wexford politician last January and made an application for him to be adjudicated a bankrupt yesterday.
The case has been adjourned until December 5 to allow Mr Wallace to engage with a personal insolvency practitioner.
Speaking after the hearing, Mr Wallace said he believed he was being pursued by Cerberus because of the concerns he had raised.
"You wouldn't have to be a rocket scientist to figure out that this is settling a score for me exposing the payment of fixers' fees to get Project Eagle across the line," he told the Irish Independent.
Mr Wallace said Cerberus had nothing to gain from making him bankrupt as his construction firm had been liquidated and his assets "commandeered" by four different banks.
A spokesman for Cerberus said it had no comment to make in relation to Mr Wallace's "settling a score" claim. The fund has consistently denied any wrongdoing and says no improper or illegal fees were paid by it or on its behalf.
Mr Wallace said he now had a couple of weeks to assess his options before the case returns to the High Court, but declined to go into specifics.
A well-placed source said the Independents4Change TD was considering three possible courses of action, including a legal challenge to the application.
The other options being considered are negotiating with Cerberus or examining whether an arrangement can be drawn up by a personal insolvency practitioner.
However, any arrangement could prove difficult to negotiate as Mr Wallace's debts are so large other creditors would also have to agree to any deal.
The TD also owes €19.1m to ACC and reached a €2.1m settlement with the Revenue Commissioners in 2012 after M&J Wallace was found to have under-declared VAT.
The application for an adjudication of bankruptcy was made to Ms Justice Caroline Costello by barrister Eddie Farrelly on behalf of Promontoria (Aran) Ltd. The proceedings were adjourned following a request by Mr Wallace's barrister Keith Farry.
Mr Wallace was present in court for the application. Wearing blue jeans and a dark blue shirt, he stood at the back of the courtroom and did not speak during the brief hearing.
He has been a vociferous critic of the Project Eagle deal, consistently questioned the sale price and raising concerns about alleged kickback payments.
Even if he is adjudicated a bankrupt, Mr Wallace will be able to hold onto his Dáil seat. A change in the law two years ago removed the prohibition on bankrupts being members of the Dáil.
Earlier this year, the TD set up a website called Namaleaks.com, seeking to uncover "possible injustice and poor practice related to Nama and financial institutions in Ireland".
He said last week that the website had received further information relevant to Project Eagle.