'Compelling evidence' Dunne filed in US to avoid Irish bankruptcy moves
THERE is "compelling evidence" that developer Sean Dunne made a deliberate choice to file for bankruptcy in the US – when he knew Ulster Bank was moving to bankrupt him here, a court has ruled.
The High Court also ruled that there was "circumstantial but nonetheless compelling evidence" that the Carlow-born builder was evading service of the Irish bankruptcy proceedings.
It came as the court rejected the 59-year-old's bid to have his Irish bankruptcy ruling overturned, also rejecting claims by Mr Dunne that he was not living and working in Ireland for three years before he filed for bankruptcy in the US.
The developer had claimed he had not lived in Ireland since 2007, living instead in Paris, Geneva and London before settling in America.
Mr Dunne, who is now bankrupt in both countries, is fighting a transatlantic bid to disclose details of his financial affairs amid claims by the National Assets Management Agency (NAMA) that he fraudulently transferred properties to his wife Gayle Killilea-Dunne.
Mr Dunne is expected to appeal yesterday's ruling to the Supreme Court.
The Irish bankruptcy proceedings were initiated by Ulster Bank last February over default on loans for some €161m issued to buy properties in Dublin. Ulster Bank began bankruptcy proceedings in Ireland a month before Mr Dunne, now living in the US, filed for bankruptcy in Massachusetts.
He claims to have debts of some €1bn and assets of €55m.
He was adjudicated a bankrupt in Ireland last July and yesterday High Court Judge Mr Justice Brian McGovern deemed this bankrupcty valid. Ulster Bank and NAMA both opposed Mr Dunne's bid to overturn his Irish bankruptcy.
Last July's declaration of bankruptcy here formed part of parallel applications to have Mr Dunne adjudicated a bankrupt in both America and Ireland.
Following an application by Ulster Bank, supported by NAMA, the US court appointed trustee managing Mr Dunne's US bankruptcy ruled that parallel proceedings would benefit Mr Dunne's creditors as the vast majority of his properties are in Ireland. Judge McGovern rejected arguments by Mr Dunne that the bankruptcy should be set aside, on the basis he is domiciled in the US.
The judge said he had particular regard to an email by Mr Dunne to Ulster Bank in November 2010 stating unambiguously: "My Domicile is Ireland."
The judge said he also had regard to other material, including an email from his wife in December 2010 to Sotheby's International Realty stating ". . . he (Sean) spends far more time in Ireland than the US and has 200 employees and three hotels in Dublin, it is unbelievable that they are describing him as a refugee who 'left Ireland'."
Given all the facts of this case, the judge said he would also refuse an application by Mr Dunne's counsel for a stay restraining any further steps in the Irish bankruptcy, pending an appeal to the Supreme Court.
The judge said it was worth noting, while Mr Dunne was seeking to have the protection of the US courts arising under bankruptcy there, he and his wife were also seeking to oust the jurisdiction of the US courts in proceedings brought against them prior to that US bankruptcy.
Those are proceedings where it was alleged his wife had received fraudulent transfers from Mr Dunne.
The Dunnes were alleging the alleged transfers occurred in Switzerland and the US court therefore had no jurisdiction, he noted.
When seen in the context of what was at issue in the bankruptcy hearings, the judge said it "does tend to show a willingness to engage in forum shopping".
Separately, Mr Dunne has initiated a legal challenge aimed at recovering documents and other material, believed to include a number of paintings, seized last week from a luxury property at the K Club by agents of the Official Assignee on foot of an order granted by the High Court.
A number of other parties also claim to have an interest in the property seized, including Gayle Dunne, an Isle of Man registered company Traviata Ltd, and a girlfriend of Mr Dunne's son John.
Dearbhail McDonald Legal Editor