Saturday 16 December 2017

Sean Dunne goes for the jugular in bitter fightback from bankruptcy

High-stakes battle moves up a gear as courts get set to determine the developer's fate, writes Ronald Quinlan

Bust developer Sean Dunne
Bust developer Sean Dunne
Developer Sean Dunne
Ronald Quinlan

Ronald Quinlan

Developer Sean Dunne has launched an extraordinary attack on the officials administering his dual bankruptcy in Ireland and the United States, accusing both them and his main creditors, the Ulster Bank and Nama of relying on a "narrative fallacy" in an effort "to vindicate their theory" on his agreement to transfer €100m in assets to his wife, Gayle.

The dramatic claim is contained in an affidavit filed by Dunne in the High Court on October 12 last in response to official assignee Chris Lehane's motion seeking to have his Irish bankruptcy extended by a period of five years beyond its original expiration date of July 27 last.

In seeking the extension, Lehane has expressed his concerns in relation to Dunne's level of co-operation with his Irish bankruptcy, including one that Walford, the Shrewsbury Road mansion Dunne purchased in trust for his wife for a record €58m in 2005, had been conveyed to its current owners, Yesreb Holdings on March 29, 2013 - the same day the developer filed for bankruptcy in the United States.

Lehane says in his affidavit of May 26 last that it is "necessary to establish who the current beneficial owner of Walford is, and on what basis the claim is being made".

Responding to this statement, Dunne accuses the official assignee of making "assertions and bald statements as facts where no evidence is provided".

"I am not or was not ever the legal or beneficial owner of Walford," he states.

Dunne strongly denies the official assignee's claim that "for the period July 29, 2013 [when he was adjudged bankrupt by the High Court in Dublin] to January 20, 2016, there was no attempt made to co-operate" with his office in "any meaningful way". In his response, the developer said: "My US statement of affairs was filed on May 3, 2013, and forwarded to my creditors. The official assignee first received same from me in my affidavit of August 7, 2013, more than three years ago. He also received a copy of my statement of affairs by letter on December 19, 2013."

"With respect, the official assignee's affidavit is less than candid regarding his knowledge of my assets as set out in my statement of affairs and provided to him," he adds.

In an affidavit lodged on May 26 last in support of his objection to the developer's discharge from bankruptcy, the official assignee stated his solicitors had written on December 11, 2013, to Dunne's then Irish lawyers, Clerkin Lynch over what he termed the developer's "continuing failure to comply with his obligations under the Bankruptcy Act". He said he had requested Dunne file a statement of affairs and attend for interview.

Responding to that assertion in his affidavit of October 12 last, Dunne took issue with Lehane's claim saying his solicitors had sent a copy of the statement of affairs he had provided for his 'first in time' US bankruptcy on December 19, 2013.

Referring to his efforts to interview Dunne in Dublin, Lehane highlights instances in early 2015 where he wrote to the developer in the United States seeking to interview him at times when he travelled to Ireland to attend rugby internationals.

Dunne for his part, responded to his alleged failure to respond to those invitations, claiming he had not received the official assignee's letters in time as he was not in the US when they arrived.

Dunne further claims in his latest affidavit that he had written to the official assignee on January 31, 2014, offering himself for interview in the United States, but that this offer had gone "unanswered".

"I do not believe the official assignee or my creditors have in any manner been disadvantaged by me not attending for interview with the official assignee prior to this year. On September 21, 2016, I submitted a detailed response to all of the official assignee's queries of August 17, 2016," he says.

Elsewhere in his affidavit, the developer complains that when he wrote to the official assignee last January offering to meet with him, that "his first suggested date [to meet] was over four months later".

Referring to that letter from Dunne's US lawyers sent on January 25 last, Lehane says he responded, setting out the developer's "continuous failure to co-operate with me and his consequent breaches of the Bankruptcy Act".

And while the official assignee says he first received a statement of personal information from Dunne's solicitors, James Lucey & Sons, on March 3 last and a further letter on March 23 last enclosing eight folders of backup documents, the developer takes issue with the suggestion that he had failed to co-operate prior to the communications.

He says: "The official assignee fails to refer to the extensive information he received from the US trustee and the creditors which was provided to these entities in compliance with my obligations under my 'first in time' bankruptcy in the US."

Dunne says he has filed his statement of affairs "in the Irish statutory form and answered all queries at interview [with the official assignee] at interview on June 29 last", something which he said he had been informed would not be necessary if he was declared a dual bankrupt in Ireland.

In his affidavit seeking to extend the developer's period of bankruptcy, the official assignee expresses grave concern in relation to the timing of the sale of Walford on Shrewsbury Road, noting that it was conveyed to its present owners, Yesreb Holdings on the same day that Sean Dunne filed for bankruptcy in the United States.

Denying that he is, was or had ever been the legal or beneficial owner of the house, Dunne says he merely "signed the contract and deed as requested and advised by solicitors for his wife pursuant to stamp duty advices of counsel and in no other capacity".

Referring to his 2005 purchase of the house in trust for his wife, Dunne says it was one of a number of assets which were to be gifted to her as part of the agreement they had drawn up that year to ensure her financial independence and that of their children.

Addressing the official assignee's concerns about that agreement, he says: "I find it difficult to believe that anyone could consider such an action to be in any way unusual."

Recalling the reasoning behind the agreement, he says: "We set about to implement same in early 2005 after the birth of our first son and the unfortunate death of my wife's best friend since the age of three, who was to be godmother to our first son, in the tsunami in Thailand on December 26, 2004. As her body had not at this time been identified, my wife travelled to Thailand on March 10, 2005, on her own. I joined her on March 18, 2005 in Hua Hin.

"As we reflected on life, birth and death, Gayle wished to ensure the transfer of wealth to her commenced immediately as she was feeling very vulnerable and insecure. It was Gayle who initiated the recording of the agreement to transfer assets which was something we had previously discussed and contemplated in June 2004…"

Dunne alleges that the official assignee, the US trustee and the creditors "are not prepared to accept the facts but prefer their own opinion being a 'narrative fallacy' in believing a story that appealed to them and choosing only to perceive the 'facts' that suited that story in an effort to vindicate their theory of what was in my mind and intentions regarding providing financial independence to my children as far back as 2005, in this case, but as far back as 1989 when I established the Sean Dunne Trust".

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