Tuesday 16 July 2019

Ulster Bank and Nama to lend trustee €1.1m to aid pursuit of Dunne assets

Sean Dunne. Photo: Collins Courts
Sean Dunne. Photo: Collins Courts
Shane Phelan

Shane Phelan

ULSTER Bank and Nama are to give an interest free loan of more than €1.1m to help a US bankruptcy trustee trying to recover and sell off the assets of bust developer Sean Dunne.

The unusual move comes as trustee Richard Coan continues to investigate the transfer of tens of millions of euro in assets to Mr Dunne’s wife, former journalist Gayle Killilea.

According to a court filing, lawyers for trustee Richard Coan say the loan is necessary in order for him to perform his duties, pay administrative expenses and maximise returns for unsecured creditors.

The Carlow-born businessman was a prominent developer during the Celtic Tiger era, when he was dubbed the ‘Baron of Ballsbridge’. However, his fortunes dipped during the economic crash and after relocating to the US he filed for bankruptcywith debts of about €700m in 2013. He was also adjudicated bankrupt in Ireland the same year.

Mr Dunne is currently undergoing a dual bankruptcy process both in Connecticut and Ireland, which has taken up considerable court time on both sides of the Atlantic.

He was held in contempt by a US judge in August 2017 for failing to co-operate with a request from Mr Coan.

In Ireland, his bankruptcy has been extended until 2028 by the High Court over his “wilful and deliberate” failure to co-operate with Official Assignee Christopher Lehane. Ms Justice Caroline Costello criticised him for hiding or not disclosing information about certain assets and said he was a “deeply dishonest” witness.

Lawyers for Mr Coan put the loan agreement before the United States Bankruptcy Court in Connecticut for approval earlier this week. Ulster Bank and Nama are Mr Dunne’s biggest creditors. Under the agreement, Ulster Bank would provide $599,887 (€525,767) and Nama would provide $675,112 (€591,698)  on an interest free basis.

The bankruptcy estate will not be required to grant the lenders a security interest over assets in the estate.

The cash is to be repaid on the dismissal of the bankruptcy case or earlier if sufficient funds are recovered by the trustee.

Lawyers for Mr Coan said because Mr Dunne did business in Europe, North America and Africa prior to his bankruptcy, the expense associated with the trustee’s administration of the estate and investigations and litigation regarding assets and transfers has been, and will continue to be, significant.

Court filings outlined how credit facilities totalling €660,000 were previously extended to the bankruptcy estate by Ulster Bank and Nama, but these are “nearly fully expended”.

In a recent court filing, Mr Coan alleged emails in deleted email accounts show Mr Dunne made efforts to conceal his ownership of Walford, Ireland’s most expensive house, when it was purchased for €58m in 2005.

Mr Coan has been seeking emails from a number of Gmail accounts used by Mr Dunne as part of a lawsuit in which the trustee is seeking to reverse the transfer of tens of millions of euro in assets to Ms Killilea.

He alleges the assets were fraudulently transferred and are still under the control of Mr Dunne. But the claims have been denied by Mr Dunne and Ms Killilea, who maintain the transfers were lawful and made at a time when he was solvent.

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