Constitutional challenge to bankruptcy laws

A CONSTITUTIONAL challenge is to be brought against Ireland’s bankruptcy laws, the High Court has been informed.

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.

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

Yesterday, 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 bankruptcy are disproportionate. Counsel added that the constitutional challenge is separate to the proceedings currently before the court.

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

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

Ms Justice Dunne, following an application by Mark O’Connell BL, for Ms Heavey, agreed to adjourned the bankruptcy proceedings to mid-July.

Mr O’Connell informed the court that his client had put a proposal to the petitioning 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.

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

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