Bank moves to seize control of Sean Dunne's D4 mansion
Bank of Scotland has mounted a legal bid to seize bust developer Sean Dunne's former home on Ireland's most exclusive street.
The lender last night asked a US court to lift restrictions it currently faces so it can foreclose on the €4m mansion on Dublin's Shrewsbury Road.
The property, called Ouragh, was built by Dunne in 2002 and he lived there with his wife, socialite turned property developer Gayle Killilea, until 2007.
It was subsequently rented to the South African Embassy, but with that lease due to run out at the end of this month, Bank of Scotland is now seeking to seize control of the property.
The lender, which pulled out of the Irish market four years ago, is prevented from doing so after Dunne filed for bankruptcy with debts of €695m.
Dunne is facing an unprecedented dual bankruptcy process in Ireland and the US, where he and his wife have lived for the past four years.
He has already been declared bankrupt in Ireland and is facing a bankruptcy trial in the US, with NAMA seeking to block his discharge as a bankrupt there.
In legal papers filed in Connecticut, lawyers for Bank of Scotland said they now wanted the lifting of a "stay" put in place while the bankruptcy process takes place.
This has stopped the bank from trying to salvage some of the €12m it loaned Dunne, sums guaranteed against Ouragh.
The first loan, for €7m, was drawn down in December 2002 and granted the then Bank of Scotland (Ireland) a security interest in the property.
A second loan agreement, for an additional €5m, was entered into in July 2007 as house prices in the Dublin 4 embassy belt sky-rocketed.
According to Ben Groves, the bank's manager of retail credit operations, the total amount owed by Dunne is just over €12m. He said in a court filing that Dunne, who valued the property at €7.5m when he filed for bankruptcy, had conceded there was no equity in it.
Mr Groves said an assessment carried out in June of this year valued the house at just €4m.
He said the official assignee Christopher Lehane, the Irish official handling Dunne's bankruptcy here, had no objection to Bank of Scotland moving to have the stay lifted.
Last year the one-time 'Baron of Ballsbridge' told the High Court in Dublin he would never be able to repay the loans.
He said the €180,000-a-year being paid in rent by the South African Embassy had been almost matching the interest on the loans.
Had it not been for the rental agreement the property would have been in receivership, Dunne told the court.
Bank of Scotland's move is just the latest in a series of legal developments in recent months as the developer's creditors jostle for position.
It comes as NAMA, which is owed €185m by Dunne, intensifies its scrutiny of his finances.
The agency claims Dunne fraudulently transferred money to Ms Killilea and that this cash has been used to set up her property development business in the US.
The couple deny these claims, with Dunne claiming NAMA is "on a fishing expedition".
NAMA claims Mr Dunne has withheld vital information and is pressing him for further details on bank accounts, credit card statements, receipts, utility and tax bills, tax returns, and properties.