Constitutional challenge to be taken against bankruptcy laws

A constitutional challenge is to be brought against Ireland's bankruptcy laws, the High Court was informed today.

The intention to bring the challenge was made in proceedings before Ms Justice Elizabeth Dunne against Darina Heavey of Woodbank, Saval Park, Road Dalkey, Co Dublin.

In a petition before the court Irish Edible Oils Ltd are seeking to have Ms Heavey declared a bankrupt arising out her failure to satisfy a judgment obtained against her and three other co-guarantors in March 2010 for approximately €1m.

Today John Rogers SC informed the court it was intended to bring an action on Ms Heavey's behalf challenging the constitutionality of sections of the Irish bankruptcy laws.

Counsel said that the challenge is to be brought on grounds including that restrictions placed on those declared bankrupt are disproportionate. Counsel added that the Constitutional challenge is separate to the proceedings currently before the court.

Mr Rogers added that different legal teams had been engaged and that he was appearing before the court as a matter of courtesy.

Irish Edible Oils, a company controlled by Co Louth businessman Mr Donal Kinsella, has brought the petition against Ms Heavy on the ground that with interest it now owed the sum of €1.185m.

Ms Justice Dunne, following an application by Mark O'Connell Bl for Ms Heavey, agreed to adjourn the bankruptcy proceedings to mid-July.

Mr O'Connell informed the court that his client had put a proposal to the petitoning company.

That proposal included the payment of a sum of €150,000, plus the payment of money that the guarantors are due when a property investment in the Unites States matures.

Counsel for the petitioner told the court that their client had concerns about the proposal.

In granting the adjournment the judge said that she was not taking into account the fact that a constitutional challenge maybe taken against the bankruptcy laws.

However the judge said that a proposal had been made on behalf of Ms Heavey and that the petitioning company should take "a realistic approach" to the matter.