Dunne bankruptcy - Mortgage holders look on in envy

On Good Friday, American-based developer Sean Dunne joined a long list of people connected with property or banking to seek the comfort, the out-of-reach sanctuary, of being declared bankrupt outside of this jurisdiction.

Last year, Finance Minister Michael Noonan confirmed that 20 developers managed by Nama had secured bankruptcy rulings in Britain. It is likely that that figure has grown, and that similar rulings have been sought elsewhere. Shorn of its legal choreography, this means debts are recognised as unrecoverable and the debtor is, in time, free to resume business.

Mr Dunne may do so in America next year, older, wiser, and without a blemish on his reputation. Under our new bankruptcy laws, he might have to depend on the support of his social columnist-turned-property developer wife, Gayle Killilea, for three years.

Mr Dunne, one of Bertie Ahern’s guests in Washington when he addressed the House of Congress five years ago this month, estimates his liabilities at between €390m and €780m and suggests he has assets of something between €1m and €10m.

It is hard to know what such imprecision, such a loose, two-fingered estimate might infer, but it is certain that considerable sums are owed to State-owned AIB, Bank of Ireland or Ulster Bank, just three of more than 30 creditors listed on Friday. And, even if it is April Fools’ Day, Mr Dunne cannot imagine that, as he has asserted, his debt to this society has been cleared because Nama controls some properties he once held, that he once employed people here, and that he paid taxes here. If he does, he remains as deluded as he was when he paid €57m for an acre of land.

It is more than ironic that Mr Dunne filed for bankruptcy in the week tens of thousands of people struggling with debts all but irrelevant compared to his — or those of his insolvent peers — wondered if they might have to give up health insurance, membership of sports clubs, satellite television, or even their career if their income did not cover childcare costs, to meet revised mortgage arrangements.

It is probably coincidental but the timing highlight a certain contempt at the heart of how different people are treated differently when insurmountable debt is dealt with. That so many people struggling to repay mortgages find themselves so ensnared because Mr Dunne and his colleagues, with the collusion of the banks, did so much to drive property prices to gold-rush levels, only rubs salt into the wound. That those very same banks will hold the whip hand under our proposed personal insolvency legislation only highlights the fish-of-one-fowl-of-another arrangements we supinely tolerate.

Despite his travails, Mr Dunne, and many others in similar circumstances, still enjoy lifestyles so far beyond what is normal that it offends the very idea of social equity or justice. Former senior politicians and some of the every highest civil service pensioners could be put in the same bracket, albeit on a different plane. As so many people begin to realise how grim life with a revised mortgage package might be, this disparity is utterly unsustainable. Unless Government quickly and firmly tackles this festering and deeply divisive issue, last week’s by-election victory may, for them, soon become a fond memory of how good things once were.

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