independent

Wednesday 16 April 2014

The Baron may be bankrupt, but tangle with his lady at your peril

Sean Dunne and his wife Gayle Killilea, who now live in Greenwich, Connecticut.

Developer Sean Dunne, the 'Baron of Ballsbridge', has debts of up to a billion dollars (€770m) and is locked in legal trench warfare with NAMA, but he still has a formidable weapon in his armoury.

IT was the moment when the Irish property bubble was transformed from mere wild exuberance into full-scale mania.

In mid-2005 Sean Dunne agreed to pay almost €380m for the Jurys and Berkeley Court Hotels in Ballsbridge – Dublin's swankiest suburb.

Even at the time it seemed like a very high price and it quickly emerged that Mr Dunne had bid almost €100m more than his nearest rival.

In fairness to Mr Dunne, he was prepared to put his money where his mouth was with about a third of the purchase price – €125m – coming from his own pocket.

Mr Dunne obviously couldn't get enough of Ballsbridge.

In 2005, he is also believed to have paid €58m for Walford on Shrewsbury Road, by far the highest price ever paid for a private residence in Ireland.

The following year, he paid another €200m for the AIB headquarters and €130m for the Hume House office block, which bordered the Jurys site.

This brought his total investment in Ballsbridge to more than three-quarters of a billion euro.

Mr Dunne, perhaps not surprisingly, was dubbed the 'Baron of Ballsbridge' as he unveiled ambitious plans to "bring Knightsbridge to Dublin".

The centrepiece of his proposed €1bn redevelopment of the Jurys/Berkeley Court site was to be a 37-storey apartment building which, had it ever been built, would easily have been the tallest building in Ireland.

The locals, not surprisingly, objected strongly and the scheme was rejected by Bord Pleanala in January 2009.

By the time Bord Pleanala had delivered its ruling, the result was of only academic interest.

The Irish property bubble had long since bust and the banks were no longer prepared to lend the vast sums of money needed to finance prestige projects such as the one Mr Dunne had planned for Ballsbridge.

Mr Dunne was born in Tullow, Co Carlow, 59 years ago and first came to prominence when he successfully redeveloped the St Helen's site in the south Dublin suburb of Booterstown in the early 1990s.

In a tough business Mr Dunne was tougher than most. Unlike many of his fellow-developers who shunned publicity, he appeared as often in the gossip columns as the business pages.

His status as a celebrity developer was sealed when he married former Sunday Independent social diarist Gayle Killilea, 21 years his junior, in 2004.

The couple, who now have three young sons, first met at the Galway Races in 2002.

Ms Killilea had previously been close to the artist Graham Knuttal.

With the property market imploding, Mr Dunne's creditors – which included NAMA, owed €185m, and Ulster Bank, which was owed a further €163m – sought the repayment of their loans.

Mr Dunne's Ballsbridge empire unravelled at dizzying speed and the first sign that he might be losing control came in February 2010 when the banks who had lent him the money to purchase Jurys and the Berkeley Court – led by Ulster Bank – took a "substantial" stake, widely reported at the time to be at least 70pc, in the properties.

Agents failed to find a buyer for Walford, despite a reduction in the asking price by almost three-quarters to "only" €15m, while Mr and Mrs Dunne's family home Ouragh – also on Shrewsbury Road – has been let to the South African embassy. Then, in July 2011, NAMA appointed a property receiver to a number of his assets, including Hume House.

Mr Dunne lost his final toehold on the site in January 2012 when the banks took complete control of the former Jurys and Berkeley Court Hotels.

Knightsbridge wasn't coming to Dublin any time soon.

In July 2011, NAMA demanded the immediate repayment of loans from AIB, Bank of Ireland and Irish Nationwide on which Mr Dunne had given personal guarantees.

In March 2012 he consented to a High Court judgment against him for this amount in what was widely seen at the time as the penultimate stage on the road to Mr Dunne's bankruptcy.

Mr Dunne was under no illusions as to the likely outcome of his financial problems.

In a remarkably frank interview that he gave to the 'New York Times' in January 2009 "on (in the words of his interviewer) perhaps his fifth pint of Guinness, capping a rollicking night of champagne cocktails, followed by a wine-soaked dinner, Mr Dunne conceded that: 'The Celtic Tiger may be dead and if the banking crisis continues I could be considered insolvent.

'But the one thing I have is my wife and children – they can't take that away from me'."

As his financial problems worsened, Mr and Mrs Dunne moved to the United States and settled in Greenwich, Connecticut.

THERE the couple lived in some style in a lavish mansion, paying a monthly rent of $17,500 with Mr Dunne driving a Lexus SUV and Mrs Dunne a Jeep Cherokee.

One of the most remarkable features of the Dunnes' American sojourn has been the emergence of Mrs Dunne as a property mogul in her own right, a development that has drawn the ire of NAMA.

The State's "bad bank" alleges that Mr and Mrs Dunne used a web of lawyers and shell companies to hide up to $9m that they received from the sale of a number of properties.

In a case currently before the US courts in Connecticut, NAMA has submitted documents alleging that Mr Dunne sold an apartment in the Swiss city of Geneva and two properties in the US.

One of the US properties was purchased for just $2m and, after being rebuilt, was later sold for $5.5m.

NAMA has also sought legal discovery of all transfers of money and property between Mr and Mrs Dunne since 2008.

In the legal trench warfare being conducted between the two sides, Mrs Dunne, who successfully studied for a law degree after her marriage, has shown that she is well able to mix it with NAMA's legal hired guns.

In response to NAMA's demand for discovery, she countered by seeking the discovery of the minutes of the NAMA credit committee which rejected the business plan submitted by her husband.

If she is successful in her application, she will drive a coach and four horses through NAMA's jealously guarded secrecy.

Tangle with this lady at your peril!

Irish Independent

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