Saturday 21 April 2018

Judge hits wife of bankrupt developer Sean Dunne with €50m asset freeze

Gayle Killilea with developer husband Sean Dunne. Photo: Julien Behal
Gayle Killilea with developer husband Sean Dunne. Photo: Julien Behal

Tim Healy

Gayle Killilea, wife of bankrupt developer Sean Dunne, has been ordered by a court not to reduce her assets below €50m amid concerns efforts are being made to put her husband's assets beyond the reach of creditors.

Mr Justice Brian McGovern, who presides over the Commercial Court, made the temporary order pending a hearing of further proceedings.

The order was sought by Insolvency Service official Christopher Lehane, who, as the Official Assignee in bankruptcy, is in charge of Mr Dunne's estate and realising funds for creditors.

Mr Justice McGovern said there was a strong prima facie case that Ms Killilea and her husband were "involved in an elaborate scheme" to frustrate efforts by Mr Lehane and a US bankruptcy trustee to administer Mr Dunne's affairs.

The evidence for much of that case was based on "glaring inconsistencies" in what had been said by Ms Killilea in court, in documents and in exhibits provided to the court, he said.

Mr Dunne himself referred in an affidavit to gifting €60m in assets to his wife, he said.

There was also detailed evidence of the lengths the couple had gone to in an effort to conceal assets from the bankruptcy official and of a significant lack of co-operation.

Mr Lehane's application followed the recent sale for €14m of a house in Shrewsbury Road, Dublin, which Mr Dunne said he gifted to his wife in 2005.

Walford had been bought by Mr Dunne for €58m, making it Ireland's most expensive house.

It was sold to a Cypriot company, Yesreb, for €12m in 2013.

Yesreb is reported to have sold it last December to a trust linked to financier Dermot Desmond for just over €14m.

The proceeds from the 2013 sale are to be held in a third-party escrow account until a dispute over the beneficial ownership of the property at the time is resolved.

Mark Sanfey SC, for Mr Lehane, said given what had happened with Walford, his client was concerned there would be nothing for Mr Dunne's creditors at the end of the process.

His side had no faith in a proposed undertaking from Yesreb about putting the Walford proceeds into escrow.

The money would come out of escrow when the legal problem is resolved.

Mr Sanfey said Yezreb was incorporated in Limassol five weeks before Mr Dunne's bankruptcy and was essentially a shell company.

Mark Binchy BL, for Ms Killilea, said his client would be fully contesting the claims made against her and opposed the interim order. But he said he would not oppose one meeting the net value of Walford, some €12m, in circumstances where the money would be in escrow pending further proceedings.

Mr Justice McGovern said he was granting the order that Ms Killilea not reduce her assets below €50m. He refused an application for a stay on the order.

Irish Independent

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