An appeal by Seán Dunne aimed at setting aside his Irish bankruptcy has opened before the Supreme Court.
Lawyers for the developer, now based in the US, argue his adjudication of bankruptcy by the High Court here almost two years ago cannot be allowed stand on grounds including he was previously deemed bankrupt by an US court.
Mr Dunne, represented by Bill Shipsey SC, argued Irish bankruptcy laws do not allow for dual bankruptcy findings in different jurisdictions. There are no protocols in Irish law allowing the Official Assignee here to deal with a counterpart in another jurisdiction, in this case a US court-appointed trustee, in respect of the estate of a bankrupt which is subject of dual proceedings, it is claimed.
Ulster Bank and Nama, Mr Dunne's largest creditor, are opposing the appeal and argue the Irish adjudication should remain undisturbed.
Ulster Bank brought a petition in February 2013 to have Mr Dunne adjudicated bankrupt over default on loans of some €161 million in loans issued for properties in Dublin.
The following month, Mr Dunne filed for bankruptcy in the US state of Connecticut, where he was based, and claimed to have debts of $1 billion and assets of $55 million. In July 2013, he was adjudicated bankrupt in Ireland.
In a High Court decision of December 2013, Mr Justice Brian McGovern refused to set aside that adjudication.
In appealing Mr Justice McGovern’s refusal, Mr Shipsey argued the Irish bankruptcy should be set aside because under Irish law, a dual or second bankruptcy process is not permitted. The adjudications of bankruptcy in Ireland and the US in respect of Mr Dunne were “unprecedented”, counsel argued. The effect of dual bankruptcy proceedings meant two jurisdictions were “in conflict with each other”, counsel said.
Mr Shipsey also argued that, because Nama and Ulster Bank are secured creditors, they would suffer no prejudice by having the US adjudication in place and the estate vested in the US trustee alone.
Opposing the application, Lyndon MacCann SC, for Ulster Bank, said it was "absolutely clear" the Irish High Court has a statutory discretion to make a finding of bankruptcy notwithstanding any foreign bankruptcy proceedings.
The findings of a foreign jurisdiction did not “oust” the High Court’s entitlement to make a bankruptcy order.
One could search Irish bankruptcy laws “high and low” and not find anything preventing the Irish High Court hearing bankruptcy proceedings in respect of someone subject of a similar application in another jurisdiction, counsel added.
The appeal is being heard by the Chief Justice, Ms Justice Susan Denham, Ms Justice Mary Laffoy and Mr Justice Peter Charleton and is expected to conclude today.