A US bankruptcy trustee is seeking to borrow a further €1m from Ulster Bank and Nama to fund his pursuit of the assets of businessman Sean Dunne.
If the request is approved by a court, it would bring to €4.5 million the total loaned to trustee Richard Coan by the property developer’s largest creditors since 2014.
The move comes after Mr Dunne sought a retrial of a 2019 fraudulent transfer action where a US jury awarded €18m to the trustee. He has argued one of the main findings was later contradicted by the High Court in Dublin.
The request for approval of the loan comes despite criticism from a judge in January of large sums spent by Mr Coan on lawyers and consultants, which accounted for around half of the €6.6m expended up to that point pursuing Mr Dunne’s assets.
Connecticut bankruptcy judge Julie Manning said a “cost-benefit analysis” would have to be done at some stage.
Carlow-born Mr Dunne (66), a prominent developer during the Celtic Tiger era, filed for bankruptcy in the US state in 2013 with debts of €700m.
He lived there at the time but now resides in England.
Eight years on from the petition, little of what he owed has been recovered.
In a legal filing, Mr Coan said because Mr Dunne did business in Europe, North America and Africa, the cost of administering the estate, as well as investigations and litigation regarding the developer’s assets, had been and would continue to be significant.
Mr Coan said the loan, which has been agreed to by Ulster Bank and Nama, was needed to administer the estate as well as to exercise the estate’s rights to various assets. These include €10.5m held by the trustee in an escrow account, proceeds from the sale of Dublin mansion Walford, and a property worth €3.35m.
However, the trustee’s ability to hold on to the Walford money could be threatened if Mr Dunne gets a retrial at the United States District Court for the District of Connecticut.
In 2019, jurors awarded Mr Coan €18m after finding Mr Dunne had fraudulently transferred property, cash and other assets to his ex-wife Gayle Killilea. The award includes €14m from the 2013 sale of Walford, which Mr Dunne had purchased for €57m eight years before in trust for his then wife. The jury ordered Ms Killilea to pay the damages.
However, in a legal filing Mr Dunne cited a recent High Court ruling in a stamp duty dispute which found he did not own Walford after 2005.
He has argued the US jury verdict was based on the “factually inaccurate premise” he owned Walford in 2013 and that the court should not honour the verdict.
Mr Coan is opposing the application for a retrial.