The official in charge of Sean Dunne's bankruptcy has launched High Court proceedings aimed at setting aside the bust businessman's transfer of an interest in a €17m South African hotel to his wife Gayle.
The court heard that Chris Lehane, the Official Assignee administering Dunne's bankruptcy, wants to set aside 2005 and 2008 transactions between the Dunnes in respect of the Lagoon Beach Hotel, Cape Town, South Africa.
Mr Lehane told the court he had significant concerns about the agreements which he believed had been conducted when Mr Dunne was unable to pay his debts as they fell due. In particular the 2008 transfer had been done at a time when he had very significant liabilities in Ireland.
Mr Lehane said he believed the transactions had been entered into with the intention of hindering, defeating or delaying Mr Dunne's creditors.
In proceedings against Mrs Gayle Dunne, Mr Lehane said he wanted the transfers declared null and void by the Irish High Court so that the assets could be realised for the benefit of Mr Dunne's creditors in Ireland. He estimated the hotel is worth between €17m to €18m subject to a secured creditors interest of €6m.
Mr Lehane said there was a complex corporate structure involving companies in Ireland, the Isle of Man, Mauritius and South Africa in regard to the ownership of the Hotel. However it did not appear to be disputed as Mrs Gayle Dunne was the ultimate owner of the Hotel.
The court heard that Mrs Dunne's position in respect of the transfers was that her husband was solvent at the time of the transfers and was perfectly entitled to enter into the agreements.
The matter came before the High Court today (Monday) when Mr Justice Anthony Barr gave lawyers acting for Mr Lehane permission to serve the proceedings on Mrs Galye Dunne outside the jurisdiction. The orders were sought because the official assignee said he does not know where Mrs Dunne currently resides.
The ruling means the proceedings concerning the transfer of the Hotel can be served on lawyers in the US and Ireland, who are representing Mrs Dunne in other proceedings. The orders were granted on an ex -parte basis.
The court heard Mr Lehane had brought proceedings before the South African High Court in respect of the hotel.
A South African Court, which had recognised Dunne’s bankruptcy, granted Mr Lehane an asset preservation order. That prevented the dissipation of the hotel, or shares in the company that owns the hotel until the application seeking to set aside the transfer has been determined by the Irish courts.
Mr Lehane sought the order because he feared the asset might be dissipated before the Irish courts have ruled on the transfer agreements he seeks to challenge.
The court heard Mr Lehane did not make any attempt to personally serve Mrs Dunne and there was no suggestion she was evading personal service. He said the primary reason for making the application for service was because he did not know where she lives.
A sworn statement by Mrs Dunne to the South African courts had not contained an address for her. The statement said she was an adult female property developer and hotelier, currently residing within the United States and the United Kingdom.
The statement also said she no longer resided full time in Connecticut and spent most of her time in the UK. She said she resides with her children at a rented property, and added that she is close to completing the purchase of a property for £5m
Mr Lehane said that In all the circumstances it was appropriate the proceedings be served on her Irish and US solicitors.
In July of last year Mr Dunne was adjudicated a bankrupt by the High Court. The adjudication was initiated the previous February 2013 by Ulster Bank over default on loans for some €161m issued to buy properties in Dublin. Mr Lehane had been appointed official assignee.
Mr Dunne filed for bankruptcy in the US in March when he claimed to have debts of $1bn and assets of only $55m. The US court-appointed trustee managing Dunne's US bankruptcy has, on Ulster Bank's application, ruled that the parallel proceedings would benefit Mr Dunne's creditors.
Mr Dunne, who opposed the application to be adjudicated as a bankrupt, has appealed the decision to the Supreme Court.
Mr Dunne is also involved in litigation with Mr Lehane arising out of the seizure of property from a luxury house in Co Kildare by agents of the Assignee last November.