Archive for March 31st, 2013


The bankruptcy application filed by Sean Dunne in Connecticut on Good Friday has finally been obtained and can be downloaded here. It’s fairly straightforward, and we don’t learn very much. Sean indicated his “estimated assets” at USD 1-10m but isn’t required by the form to provide details; he indicated his “estimated liabilities” at USD 500m-1bn (€390-780m).

Interestingly, Sean ticks the box which says “debtor has been domiciled or has had a residence, principal place of business, or principal assets in this District for 180 days immediately preceding the date of this petition, or for a longer part of such 180 days than in any other District”

The filing also shows that Sean underwent debt counseling, as required  under US law, before filing for bankruptcy and a certificate is included in the bankruptcy filing which shows that at 5.54pm Eastern Time US, a counseling session by internet from someone called “Jai D Bhatt” and that a debt repayment plan was not prepared. Given the scale of Sean’s debts, the inclusion of what appears to be a perfunctory counseling session looks almost comedic.


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It encompasses the great and good of the Irish professional services landscape, three county councils, a former Attorney General, both the American Internal Revenue Service and the Irish Revenue Commissioners, as well as a couple of firms beyond these shores. The list of creditors declared by Sean Dunne in his Good Friday bankruptcy filing in Connecticut is now available on the US court system – not available without a subscription. But they can be revealed here today.


We don’t have figures yet so, we don’t know whom Sean owes what to. NAMA is not declared as a creditor, though it is possible that the creditor is named as the original bank. AIB, Bank of Ireland, Certus, IBRC, Icelandic bank Kaupthing Singer and Friedlander and Ulster Bank are all named as creditors.

Law firms, including one on the Isle of Man, property companies, surveyor firms and building management companies are amongst the creditors. NAMA Top 10 developer, Michael O’Flynn’s flagship company O’Flynn Construction is listed.

Paul Gallagher SC, the former Attorney General is out of pocket as are the top-tier law firm Arthur Cox and the lower division Beauchamps.

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We’re still awaiting the outcome of the make-or-break Paddy McKillen appeal in London, against a judgment which involves the Barclay brothers and their quest for control of the Maybourne portfolio of three upmarket hotels. The appeal hearing concluded in London nearly two months ago, and if Paddy loses, he faces significant legal costs and the prospect of life as a minority shareholder in a company controlled by the hostile Barclays.

In Dublin this week, Paddy McKillen along with controversial businessman, Denis O’Brien succeeded in obtaining an injunction at the High Court, preventing the Irish edition of the Sunday Times publishing the results of an investigation into the two businessmen’s affairs. The Sunday Times reports on the injunction today, but it is behind a paywall, there is a sneaky photograph of the story at the Broadsheet.ie here.

There was a marathon seven hour emergency hearing yesterday, Saturday, which resulted in the High Court judge acceding to Paddy and Denis’s application for an injunction. There will be a full hearing into the matter within six weeks. The case was initiated on Good Friday and the respondents are named as Times Newspapers Limited and journalist Mark Tighe. Paddy is represented by Johnsons solicitors, who coincidentally are representing Paddy in  separate Dublin High Court defamation cases initiated by Paddy in January and February against companies and individuals associated with the Barclay brothers. Denis O’Brien is represented by William Fry solicitors, which is a departure from the use of Meagher’s who generally represent the Digicel chairman in his frequent run-ins with the media.

In giving his judgment, Judge Colm MacEochaidh said “it is urged that irrevocable harm will be done to the plaintiffs [Paddy McKillen and Denis O’Brien] and the harm is first and foremost the confidentiality they have, will be lost..I accept that is the damage they will suffer”

We do know that both Paddy and Denis have been major borrowers at Anglo, now Irish Bank Resolution Corporation, and that, following the decision to place IBRC in special liquidation on 6th February 2013, both have a narrow window to refinance their loans out of IBRC before the loans are placed on the market, and in Paddy’s case, the Barclay brothers have made it known that they will pursue the loans and may be prepared to pay a premium above market value for the loans.

We also know that Paddy has had a relationship with Denis in the past. It emerged in the epic High Court battle in London last year  that “among the friends and associates who Mr McKillen said “would have delivered” financially were Denis O’Brien, a man whom he described as the “world’s greatest telecoms entrepreneur”” Paddy was talking about the financing of the Maybourne group of hotels.

The temporary injunction obtained by Paddy and Denis isn’t all-encompassing, but the Sunday Times says today that it decided that it could not publish the uninjuncted parts of the story in a way which would be intelligible to its audience. So, we don’t know what the Sunday Times investigations apparently uncovered, we don’t know if it relates to IBRC or to the Maybourne hotels, but the judge concluded the reporting was capable of damaging Denis and Paddy.

The hearing in the High Court yesterday might also be noteworthy for what appears to be an outrageous abuse of position by the presiding judge. Judge Colm MacEochaidh has been a High Court judge for just over nine months, having had a long career as a barrister beforehand, and gained prominence after being one of two people whose newspaper ad led to the setting up of the Mahon Tribunal into planning corruption. In court yesterday, he seemingly taunted Denis O’Brien by contrasting Denis’s rubbishing of Judge Moriarty and the Moriarty Tribunal with Denis’s present appeal to the mercy of the court to grant an injunction; after a recess, the Judge is reported to have asked if Denis’s barrister had consulted with his client on the ambivalence in position, and when told the matter had not arisen in consultations with Denis, the judge is reported to have said “it should have”. The judge ultimately declared that Denis would get the “full and independent protection of the court” but this little episode of petty score-settling surely begs questions about Judge MacEochaidh’s appropriateness to even act as a judge.

UPDATE: 4th April, 2013. Dublin’s “The Phoenix” magazine today claims to know what the (presumably injuncted) Sunday Times article relates to. Given that the material is subject to an Irish injunction, nothing further is going to be said about the content here, but if  “The Phoenix” is right, then WSTT is wrong below!

UPDATE: 27th April, 2013. The judgment in the temporary injunction hearing was published online yesterday and it makes for interesting reading. The judgment accepts that there will be irreparable damage done to Paddy McKillen if the intended Sunday Times story had been reported, and the judge notes that this proposition was not gainsaid by Sunday Times. For its part the Sunday Times claimed, according to the judgment, “there is a public interest of a real and weighty nature in publishing information about the manner in which the bank in question deals with one of its most significant debtors.” The judge characterises the intended article by the Sunday Times and its journalist Mark Tighe, as “1. Information of an opinion nature expressed by officials internally within the bank.  2. Information the ‘Sunday Times’ intends to report that a further loan has been extended to Mr. McKillen. 3. Information relating to the commercial relationship between Mr. McKillen and Mr. O’Brien.” The concluding part of the judgment is enlightening:

“I have decided not to grant an injunction restraining publication of the fact that a further loan was granted to Mr. McKillen. However, I say that the plaintiff has persuaded me that the publication of information of an opinion nature communicated internally within the bank by officials is a step too far and that information should not, in my view, be published. The ‘Sunday Times’ has not persuaded me that there is a public interest in that sort of opinion on behalf of the bank.

Neither am I persuaded that information relating to the commercial relationship between Mr. McKillen and Mr. O’Brien is a matter that has to be published. Those are matters which seem to me to just fall on the wrong side of the nature and extent of the sort of information that the public has a right and entitlement to know at this stage. Therefore, I grant an injunction restraining publication of information of an opinion nature communicated internally within the bank by officials as well as an injunction restraining the publication of information relating to the commercial relationship between Mr. McKillen and Mr. O’Brien.

I refuse to grant an injunction restraining publication of the fact that a further loan was extended to Mr. McKillen in the amount identified and for the purpose identified.”

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Thankfully, the troika will continue to review Ireland’s compliance with the Memorandum of Understanding, even after the last tranche of funding is handed over at the end of this year. Because, without the Troika, we would not be getting any reform of our draconian bankruptcy arrangements; it was the Troika which has frog-marched us into providing an adequate mechanism to allow seriously insolvent individuals to deal with their debts and be given a new start where they could contribute to the economy. This Government has in fact missed targets for the implementation of reforms, and even today, we have a Personal Insolvency Act which was signed into law by President Higgins on St Stephen’s Day in 2012 but it has still not been commenced. So, the three-year bankruptcy, the debt relief notices, the controversial personal insolvency scheme are all pie-in-the-sky at present though it is hoped that Minister for Justice and Equality, Alan Shatter will commence the Act shortly.

Meanwhile, on Friday in the US state of Connecticut, an Irishman, developer Sean Dunne with debts of over €350m, with a cheque for USD 306 (€239) initiated a process that will last 120-150 days and may see Sean emerge financially reborn by July 2013. Sean has engaged an attorney, or solicitor as we might say, but he didn’t have to – the fee pays for the State to provide a bankruptcy trustee.

Sean has been given a platform by the Sunday Independent today to set out his side of the story. In it, he says “I consider my debt to the Irish State to be cleared” after a lifetime of developing property in Ireland during which he employed hundreds and paid millions in tax and levies.

Many indebted Irish people will today contrast their options with Sean’s story.

How many Irish people would dearly love to be able to hand over a payment of €239 to the courts and say, “there, now you sort out my finances and by July 2013, I start with a clean sheet” Yes, it may require you to hand over your home in some instances, it may require you to hand over any savings and other valuables, but by August 2013, you would be financially reborn. And if you wanted to take the moral high ground, you could point out how much income tax and VAT and road tolls and suchlike that you had paid in your lifetime, and like Sean Dunne high-and-mightily announce “I consider my debt to the Irish State to be cleared”

So, how will Minister Shatter justify the half-hearted reforms in the new Personal Insolvency Act to the domestic audience? How can Minister Shatter defend his reforms if people with a few hundred thousands of euros debts will be put through the mill for three years and Sean Dunne, owing hundreds of millions can emerge clean as a whistle in four months?

Here is a list of NAMA developers who have been made bankrupt outside of Ireland (it may not be comprehensive)


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