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Dunne and ex-wife Killilea battle over bankrupt 'baron's' case against his son

Former developer seeks injunction over funds in the latest twist to legal saga

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Synonymous with Celtic Tiger era: Gayle Killilea and Seán Dunne. Photo: Edmund Ross

Synonymous with Celtic Tiger era: Gayle Killilea and Seán Dunne. Photo: Edmund Ross

Synonymous with Celtic Tiger era: Gayle Killilea and Seán Dunne. Photo: Edmund Ross

A furious row has erupted between former socialite Gayle Killilea and her ex-husband, bankrupt property developer Seán Dunne, after he issued legal proceedings against one of his sons in New York.

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Her legal team has claimed his actions will be "extremely detrimental" to the future of the four children they had before getting divorced last year.

The one-time 'Baron of Ballsbridge' is seeking a temporary injunction against John Dunne - his son from his first marriage and Ms Killilea's stepson - preventing him from using the funds of a Cypriot company to settle a lawsuit in Dublin.

In legal filings, Mr Dunne (65) has claimed the funds are owed to a trust for the benefit of the four children he had with Ms Killilea, who was his second wife.

He has also claimed the children, all minors, are also owners of the company, Yesreb Holdings Ltd.

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Mansion: Walford was bought for Gayle Killilea in 2005. Photo: Mark Condren

Mansion: Walford was bought for Gayle Killilea in 2005. Photo: Mark Condren

Mr Dunne wants to stop John Dunne from using Yesreb's funds to settle a legal action taken by the Official Assignee in Bankruptcy, Christopher Lehane, who is working with US bankruptcy trustee Richard Coan to recover assets for creditors.

But a lawyer acting for Ms Killilea (44) and John Dunne (32) has claimed the children had "no direct claim whatso­ever" to the funds and the injunction proceedings will be "extremely detrimental" to their long-term interests, which would be better served by resolving existing lawsuits.

Lawyer Peter Nolin also accused Mr Dunne of interfering in a settlement Ms Killilea is close to finalising with Mr Coan over €18m in assets a US jury found were fraudulently transferred to her by her ex-husband.

The former couple, who were synonymous with the Celtic Tiger era, both now live in England. Details of the row emerged in legal correspondence from Mr Nolin to Mr Dunne's New York lawyer Luke McGrath, which has been seen by the Irish Independent.

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Gayle Killilea. Photo: Collins Courts

Gayle Killilea. Photo: Collins Courts

The injunction proceedings have also been criticised by lawyers for Mr Coan, who claim the businessman is violating federal law.

The dispute is just the latest twist in the incredibly convoluted legal saga which has unfolded since the Carlow-born businessman was adjudicated bankrupt in Ireland and Connecticut in 2013 with debts of around €700m.

Much of the intervening period has been dominated by claims Mr Dunne defrauded creditors by transferring assets to Ms Killilea.

A key issue has been whether Mr Dunne held a beneficial interest in Dublin mansion Walford. The Shrewsbury Road property became the most expensive home in Ireland in 2005 when Mr Dunne bought it for Ms Killilea for €57.9m.

It was subsequently bought by Yesreb, of which John Dunne is the owner, for €14m in 2013, using a loan from Ms Killilea.

Yesreb then sold it for €14.25m in 2016 to Celtic Trustees Ltd, an Isle of Man trust set up for the benefit of billionaire financier Dermot Desmond's children.

Last June, a US jury found Ms Killilea financially liable, as the recipient of certain fraudulent transfers, to pay more than €18m to the US trustee.

This sum included the €14m from the 2013 transfer of ownership and 2016 sale of Walford. Mr Lehane has sued Yesreb in a bid to recover the proceeds of the sale, claiming Mr Dunne had an involvement with the company. The case is due to start on Wednesday.

But the matter has been complicated by Mr Dunne seeking the injunction in New York, where his son is based.

Last Friday, Mr Lehane's counsel Bernard Dunleavy SC told the High Court the injunction application would have a "significant bearing" on the case. It remains to be seen whether Mr Coan will intervene in the New York proceedings. His lawyers accused Mr Dunne of "forum shopping" and of intentionally interfering in the trustee's efforts to recoup assets.

Irish Independent