Gayle Killilea in bid to sue US building company for $500,000
The wife of bankrupt property developer Sean Dunne is seeking permission from a US court to be allowed to sue a New York building firm for $500,000 (€454,300) after an investment deal went sour.
Former socialite and gossip columnist Gayle Killilea is looking for the repayment of cash she says she invested in a firm called JDDC Construction, claiming it reneged on a deal that would have given her 50pc of the company's shares.
The sums at stake are a $250,000 (€227,150) loan advanced to the company and a $250,000 bond deposit used by JDDC in connection with a contract for renovations at Manhattan's Fashion Institute of Technology.
However, the 2012 deal turned sour and JDDC sought to have it rescinded. Its directors, Sean Doyle and Denise Campion, alleged Ms Killilea and her husband made misrepresentations that Mr Dunne had resolved debt problems in Ireland. They also alleged that the couple pledged to invest just under $1m (€908,600) but Ms Killilea had only provided $500,000.
Ms Killilea, who began operating as a property developer after the couple moved to the US in 2010, has described the claims as "baseless".
Legal papers seen by the Irish Independent reveal efforts to settle the dispute, though arbitration stalled after Mr Dunne filed for bankruptcy with debts of close to €700m in March 2013.
Mr Dunne's bankruptcy trustee, Richard Coan, then intervened in the dispute, effectively blocking Ms Killilea from pursuing a claim against JDDC.
He has alleged the $500,000 invested was not Ms Killilea's money, but that of her husband.
Ms Killilea denies this, saying the money was hers, and has asked the US bankruptcy court to lift a "stay" which is prohibiting her from suing JDDC.
In an affidavit, Ms Killilea claimed the building firm disregarded the terms of the investment agreement, failed to make payments due to her, failed to pay subcontractors and refused to provide financial transparency.
She also claimed JDDC used her husband's bankruptcy "as a pretext to delay, frustrate and suspend the arbitration", depriving her of the repayment of her loan and her share of the company's profits.
The allegations are disputed by JDDC. Its directors have previously claimed Mr Dunne told them he was looking for a company to carry out construction work and that he had $6m (€5.45m) in personal funds available for immediate investment.
They claimed Mr Dunne said any investment would have to be in his wife's name as he was emerging from financial difficulties and had bad credit.
It is the second time since her relocation to the US that Ms Killilea has taken legal action in a bid to recover funds allegedly misappropriated from her.
She previously sued her former immigration lawyer Philip Teplen over his failure to return $500,000 placed in an escrow account to support her application for a US investment visa.