The High Court has agreed to assist a United States bankruptcy trustee in dealing with the Irish assets of David K. Drumm, holding that it had inherent jurisdiction to make an order in aid of the US proceedings.
In a judgment delivered on 13 December 2010, Ms Justice Dunne said she proposed to make the order sought by Kathleen P. Dwyer, who had been appointed trustee after Drumm filed a voluntary Chapter 7 bankruptcy petition in the US Bankruptcy Court for the District of Massachusetts in October 2010. The judgment records that the petition stated Drumm had lived in Massachusetts for the preceding 180 days and that he submitted to that court’s exclusive jurisdiction.
Dwyer sought assistance in relation to Drumm’s property and assets in Ireland, including a property at 20 Abington, Malahide. The property had been registered jointly in Drumm’s and his spouse’s names until May 2009, when it was conveyed into the spouse’s sole name. In her affidavit, the trustee said it was unencumbered and worth approximately €2.1 million. The judgment records that separate proceedings involving the spouse and Anglo Irish Bank had included an assertion that the transfer was a fraudulent conveyance. The spouse had indicated a willingness to set the conveyance aside and given an undertaking, according to the trustee’s evidence.
The application was made ex parte, although counsel for Anglo Irish Bank appeared after advance notice. The trustee asked the Irish court to declare that the bankrupt’s Irish property vested in her, provide for registration of a vesting certificate, assist in determining and realising his interests in Irish assets, and assist in examining him about his estate.
The court noted that section 142 of the Bankruptcy Act 1988 could not support the application because the Government had not extended its reciprocal assistance provisions to the United States. The trustee instead relied on the court’s inherent jurisdiction and the principle of comity between jurisdictions. Justice Dunne accepted that the US and Irish bankruptcy systems were sufficiently equivalent for the purpose of the application. She also relied on authorities recognising a court’s discretion to assist a foreign trustee concerning immovable property.
Justice Dunne said there was no public policy reason to refuse assistance and considered it more practical for the Irish property to be dealt with by the trustee for the benefit of all creditors. She was satisfied that the court had the inherent jurisdiction claimed and said she proposed to make an order in the terms of the relief sought. The judgment does not set out a separate final order or address whether the Malahide conveyance was in fact set aside.