Seán Dunne set to face creditors in US bankruptcy case

Property developer Seán Dunne will face questions before his creditors for the first time in his US bankruptcy proceedings next week, after withdrawing an application to have the meeting postponed.

The creditors' meeting will take place in New Haven, Connecticut, next Wednesday as rescheduled after being delayed on two previous occasions.

At a court hearing in the US bankruptcy court in Connecticut there was legal argument between lawyers for Mr Dunne and his wife Gayle Killilea on one side and his bankruptcy trustee and representatives of creditors Ulster Bank and the National Asset Management Agency on the other.

The argument centred on the court order last week granting Ulster Bank permission to proceed with the bank's petition to make him bankrupt in Ireland as well in the US in a dual bankruptcy.

Mr Dunne's attorney James Berman said that his client was "likely" to appeal the ruling. He described the potential for two bankruptcy cases in two jurisdictions as "unprecedented."

Fresh financial start
He said there could be competing interests between the Irish and US courts over when Mr Dunne will be discharged from bankruptcy allowing him to walk away debt-free with a fresh financial start.

Judge Alan Shiff gave Mr Dunne, who did not attend the hearing, a three-day stay allowing him to apply for a stay on the order, pending an appeal to the US District Court, if he filed papers by close of business on Friday. The judge denied a request from Mr Dunne's lawyers for a 14-day stay.

Ulster Bank's attorney Hank Baer expressed concern about any delay in the court order coming into effect as the bank's petition to have Mr Dunne adjudicated bankrupt in Ireland was due to come before the Irish courts again on July 1st.

The Irish courts come close to shutting down for two months for the summer break and there was a “real risk” of nothing happening for several months, he told the court.

Judge Shiff said that the dual bankruptcy was necessary as all of Mr Dunne’s real properties and almost all of his personal property were in Ireland, and there were also interests in South Africa and Switzerland.

Mr Dunne had little at stake in the US courts except for his discharge from bankruptcy, giving him a fresh financial start in the US and this “may or may not be challenged”, he said.

Ms Killilea's attorney Eric Henzy said she was concerned that there should be an "orderly" bankruptcy process. Given that there were going to be "two full-blown bankruptcies", the parties ought to know "who is doing what, when," he said.

Mr Dunne, who has debts of $942 million faces the possibility of being declared bankrupt in Ireland as well as in the US if Ulster Bank successfully petitions the Irish High Court to adjudicate him a bankrupt in Dublin.