Irish Bank Resolution foreign case recognized, objections overruled

By Caroline Salls

Pittsburgh, Dec. 18 - Irish Bank Resolution Corp. was granted final U.S. recognition of its foreign proceeding, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the final ruling was delayed and further interim relief granted in November after a day-long hearing in which the legitimacy of the Irish case under U.S. laws was called into question.

John Flynn Sr., a permanent U.S. resident who operates U.S. corporations, joined Castleway Properties, LLC and Walnut-Rittenhouse Associates, LP in opposition to final recognition of the proceedings in Ireland during a Nov. 6 hearing.

At issue was whether the special law enacted by the Irish Parliament to wind down the company's operations met the requirements for recognition under Chapter 15 of the U.S. Bankruptcy Code.

Flynn, Castleway and Walnut-Rittenhouse argued that Ireland's minister of finance is the owner of the businesses involved in the wind down, is the person in ultimate control of the wind-down process and can change the course of the case without consultation with interested parties and without concern for judicial review or reversal.

Irish Bank Resolution attorney Van C. Durrer, II said at the Nov. 6 hearing that the case meets all of the criteria outlined in Chapter 15.

Flynn sued the company in New York state court, alleging 18 years of overcharging by Irish Bank Resolution and its predecessor, Anglo-Irish Bank. He says the company owes him $11 million.

U.S. recognition of the proceedings in Ireland would halt that lawsuit until the bankruptcy case ends.

Castleway and Walnut-Rittenhouse said Irish Bank Resolution violated their loan contracts by transferring the debt to a non-bank entity in Ireland - a special vehicle called National Asset Management Investments Ltd. - which the National Asset Management Agency established to hold its assets.

In Wednesday's order, judge Christopher S. Sontchi overruled all objections to the extent they were not withdrawn. The judge said the order was filed Wednesday in the interest of time and is subject to a subsequent order or opinion detailing the legal reasons for his ruling.

Anglo Irish Bank was nationalized in 2009, and Irish Bank Resolution is the vehicle established to wind down operations.

Irish Bank Resolution, a Dublin-based successor to Anglo Irish Bank, filed for bankruptcy on Sept. 17. The Chapter 15 case number is 13-12159.

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