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Tuesday 23 September 2014

US court told of plans by creditors to block Dunne's bankruptcy withdrawal bid

Orlaith Farrell

Published 28/08/2014 | 02:30

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Sean Dunne in New York

A US Judge will decide next month if bust developer Sean Dunne gets to withdraw from bankruptcy proceedings in America.

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The court-appointed bankruptcy trustee, as well as creditors NAMA and Ulster Bank, yesterday outlined plans during a brief hearing in Connecticut to oppose the surprise application by the former 'Baron of Ballsbridge.'

In a shock move last week, the former developer applied to withdraw his bid for bankruptcy in the US on the basis that he "did not have the resources" to continue to defend creditors' objections to him walking away from his debt.

Lawyer for the court-appointed bankruptcy trustee, Timothy Miltenberger, told the Connecticut Bankruptcy Court yesterday that they would be opposing the attempt because "it would not be in the best interest of creditors".

The lawyer for the office charged with overseeing Mr Dunne's discharge from debt told the court that the trustee has "evidence that the debtor has complete dominative control over his wife's assets".

Mr Miltenberger said the trustee was investigating transfers between Mr Dunne and his former gossip columnist wife Gayle Killilea Dunne, citing previous testimony from the debtor in a creditors' meeting that he had transferred $40m (€30.3m) to his wife and that he "wishes he could have transferred more".

Investigating

The lawyer argued that the motion to withdraw should be denied as the trustee was "actively investigating" any transfers between the couple.

Mr Miltenberger also highlighted that it was Mr Dunne who had initiated proceedings in America. "Sometimes you walk in to federal court, you don't have the right to walk back out," he added.

Eric Henzy, a lawyer for Mr Dunne's wife, Ms Killilea, strongly refuted the trustee's claims that Mr Dunne was in control of his wife's assets. Mr Henzy was told to file a formal motion with the court when he requested that his client be allowed to take part in the pre-trial hearing next month.

The Carlow-born businessman claims that he can't afford to defend NAMA's attempts to block his discharge from debt and even if successful, there would be nothing to guarantee he wouldn't face a similar challenge from the toxic bank in Ireland.

Once one of the country's most prolific builders, Mr Dunne last year filed for voluntary bankruptcy in the US, where he has lived since 2010, with debts of €700m.

NAMA, one of the bust developer's largest creditors, launched a legal campaign to block his release from debt in July of last year, alleging he made fraudulent transfers to his wife.

NAMA is owed €185m by Mr Dunne and claims the debtor transferred millions of euro to his wife before filing for bankruptcy. The judge will decide on the application on September 23.

Irish Independent

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