Dunne seeks deadline for bankruptcy action

Wednesday 07 May 2014 21.54
Sean Dunne's case is due before the US Bankruptcy court on 20 May
Sean Dunne's case is due before the US Bankruptcy court on 20 May

Developer Sean Dunne has asked a US court to set a deadline for Irish and US bankruptcy court officers to reach agreement detailing how his dual bankruptcies will be managed.

Mr Dunne filed for bankruptcy in America in March 2013 with debts of over $900 million.

He was declared bankrupt in Ireland last July, although he is appealing that to the Supreme Court.

The Irish bankruptcy only proceeded because the US court lifted a worldwide stay on proceedings against Mr Dunne, on the condition that there was an "ad hoc protocol" agreed between both jurisdictions to manage his business affairs.

The detail of this arrangement was supposed to be agreed between the US court-appointed "Trustee" and the Irish court-appointed "Assignee" and relayed to Mr Dunne.

This has not yet happened and Mr Dunne is asking the US Bankruptcy Court in Connecticut to set a deadline for this protocol to be agreed.

Mr Dunne's solicitor said the protocol is "necessary for the administration of any dual bankruptcies", and that the absence of such an arrangement "threatens an enormous waste of judicial resources", and prejudices his client.

According to legal papers filed with the US court in the past few days, Mr Dunne claims that the Irish court assignee is acting as if the US court order does not apply to him.

In the US hearing to allow the Irish proceedings to continue last year, US trustee Richard Coen said that the Irish action would not prejudice Mr Dunne, because any demands by the Irish court appointee Christopher Lehane for business records and other documentation would come through the US trustee.

However Mr Dunne's solicitor argues that this has not been the case.

He cites the case of a former accounting adviser, Ross Connolly, who was previously employed by Mr Dunne and has recently been contacted by the Irish bankruptcy trustee seeking assistance reviewing Mr Dunne's business affairs.

This individual had previously agreed to give evidence to the US court, but an arrangement could not be reached surrounding expenses such as travel and accommodation, so that deposition has not yet taken place.

Mr Dunne maintains that the Irish court assignee is operating independently and not abiding by the instruction to reach agreement with the US authorities.

He is asking the US bankruptcy court to make an order that this dual bankruptcy management arrangement should be agreed and brought before the courts within a set timeframe.

The legal papers also explain that Mr Dunne believes there is no legal authority in Ireland for such a bankruptcy management arrangement across jurisdictions.

However, he feels that such a protocol is preferable to a situation whereby the "Trustee and the Assignee are making up the rules for the unprecedented dual bankruptcies as they go, without any prior court approval".

Mr Dunne is using this point as one of his grounds of appeal against his bankruptcy to the Irish Supreme Court.

The case is due to come before the US Bankruptcy court on 20 May.