Saturday 19 October 2019

Killilea hits out after order to repay €18m in Dunne transfers

‘Sole ownership’: Gayle Killilea, above with Seán Dunne, argued Walford on Shrewsbury Road, Dublin, had been owned by her since October 2006. Picture: TONY GAVIN
‘Sole ownership’: Gayle Killilea, above with Seán Dunne, argued Walford on Shrewsbury Road, Dublin, had been owned by her since October 2006. Picture: TONY GAVIN

Shawn Pogatchnik

Gayle Killilea has hit out after being ordered to hand back more than €18m in “fraudulent transfers”, claiming she had been vindicated in parts of the US case.

A jury in Connecticut unanimously ordered the estranged wife of bankrupt developer Seán Dunne to pay the millions to a bankruptcy trustee.

They found that cash and assets were transferred out of creditors’ reach as Dunne’s property empire unravelled during the financial crash a decade ago.

The total sum included €14m from the 2013 transfer of ownership and 2016 sale of the couple’s Ballsbridge property, Walford.

The 10-member jury unanimously found on its official verdict form, seen by the Irish Independent, that Mr Dunne had committed “intentionally fraudulent transfers” and “constructively fraudulent transfers” in violation of US Bankruptcy Code in eight instances from 2008 to 2013.

But Ms Killilea’s legal team called it “a mixed result” – citing potential grounds for appeal and noting that jurors made “no finding of any misconduct or fraud by Gayle Killilea”.

The verdict at US District Court in New Haven, Connecticut, followed a five-week civil trial.

Lawyers for bankruptcy trustee Richard Coan sought to compel Ms Killilea to pay tens of millions in euro she had received from her husband in cash, property and other assets.

Those transfers preceded Mr Dunne's 2013 application for US bankruptcy protection.

The jury found Ms Killilea financially liable, as the recipient of certain transfers, to pay more than €18m. This sum included:

:: €14m from the 2013 transfer of ownership and 2016 sale of the couple's Ballsbridge property, Walford;

:: More than €3m in cash transferred in October 2008 from the couple's joint account at Credit Suisse to Ms Killilea's individual account at the same Swiss bank;

:: $278,297.18 in July-November 2010 cash transfers between bank accounts in Connecticut;

:: €300,000 from the February 2012 transfer of ownership of a Dublin property on North Wall Quay.

The senior counsel for Mr Coan's legal team, Thomas H Curran, said he was "obviously very happy with the result".

He said the four-day length of the jury's deliberations indicated their conclusions had been carefully considered.

"We are very comfortable this award will hold up to any appeal," he said in an interview.

Lawyers for Mr Dunne declined comment to reporters outside the courtroom.

In a statement, Ms Killilea's legal team pointed to possible avenues of appeal and called it "a mixed result". They also noted jurors made "no finding of any misconduct or fraud by Gayle Killilea".

The statement said plaintiffs representing a range of creditors had sought up to €100m - a headline figure not confirmed by Mr Coan's legal team - but Ms Killilea had been vindicated in claiming sole ownership of many assets transferred by her husband in advance of his bankruptcy applications.

These transfers included his share of a Switzerland condominium portfolio, a US property investment portfolio, "director's loans" drawn against Mr Dunne's ownership of a South African resort, and assorted luxury furnishings.

Jurors also concluded that bankruptcy trustees were not entitled to seize the couple's one-time home in Greenwich, Connecticut.

Mr Curran said US District Judge Jeffrey Meyer had reserved his own judgment on some counts and other documented transfers and may yet order additional reliefs for Mr Dunne's creditors to be imposed.

Ms Killilea's legal team described the €100m figure as "wildly exaggerated from day one".

They added the jury may have been "confused" on the date she gained sole ownership of Walford, which had been purchased in 2005 for €58m. "We believe the jury was confused because they found that Walford was transferred by Seán Dunne to Gayle Killilea on March 29, 2013, when it had been owned by Gayle Killilea since at least October 2006," the statement said. "Defendants may address the legal issues surrounding Walford and other aspects of the verdict with Judge Meyer and, if necessary, may pursue an appeal."

During the trial, lawyers for the couple said Mr Dunne had transferred assets into his wife's name out of love for her and their children, not to thwart creditors' demands for repayment.

The judge and both sides' lawyers are expected to convene within a week to discuss Judge Meyer's own consideration of whether other transfers constituted "unjust enrichment".

Irish Independent

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