The judge in Celtic Tiger property developer Sean Dunne’s decade-plus US bankruptcy today ordered more than $3.8 million (€3.24 million) in payments from the estate’s assets to his two ex-wives and lawyers involved in the case.
Per the judge’s order, Mr Dunne’s first wife Jennifer Coyle will receive $1.9 million and his second wife Gayle Killilea, $925,306.
Reached by text, Ms Killilea declined to comment.
Mr Dunne, who had sought to block the payments as recently as Thursday, said via email that he had not yet seen the order.
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The payments will leave about $12 million in the estate, which the trustee is seeking to distribute to other creditors, including the National Asset Loan Management (part of Nama), the successor to the now defunct Ulster Bank business in the Republic, and the Bank of Scotland.
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US bankruptcy Judge Julie A Manning, who is presiding over the case in Bridgeport, Connecticut, has indicated she intends to rule on those distributions soon.
At a hearing in late October, Mr Dunne, acting as his own lawyer, managed to delay the distributions by challenging the trustee’s appointment and bond, and arguing that pending cases in Ireland could lead to his bankruptcy’s dismissal.
Judge Manning agreed to delay distribution to consider those arguments. On Friday, she rejected Mr Dunne’s argument that the trustee was improperly appointed or lacked a proper bond.
During another hearing earlier this week, the judge said she would disperse money to Mr Dunne’s ex-wives because their claims would remain even if the bankruptcy were dismissed. The trustee sought to make the distributions by year’s end to save the estate on taxes.
Mr Dunne was to have appeared at this week’s hearing via video hookup, but pulled out at the last minute, emailing that he was losing internet access. He subsequently filed an objection to the distributions to his former wives, saying they were wealthy thanks to him and had no immediate need for cash.
“Both my former wives are very wealthy due to marriages to me and the fruits of my labour, whereas I am an undischarged bankrupt with no income or assets,” Mr Dunne wrote in a filing the court received on Thursday morning.
“It is not as if either Ms Coyle or Ms Killilea have a pressing need for money to add to their existing substantial worth,” he added.
He asked the judge to delay any distributions until a February 18th hearing in his ongoing Irish litigation.
The other payments approved Friday were $693,251 to bankruptcy trustee Richard M Coan and $333,913 to the US law firm of Cohn, Birnbaum & Shea, which represented Mr Coan.
Mr Dunne’s property empire collapsed in the wake of the 2008 financial crash, leaving him hundreds of millions of euros in debt. Besieged by creditors, Mr Dunne moved to the United States where he attempted unsuccessfully to make a fresh start, eventually declaring bankruptcy there in 2013.
In 2019, a US jury found that he had improperly transferred $19.1 million to his then-wife Ms Killilea to shield it from creditors and ordered it be paid to them. Mr Dunne has spent the past six-plus years trying to get the verdict overturned and prevent distribution of the funds.
The trustee’s final report would pay out the estate’s remaining assets, $6.1 million to the National Asset Loan Management Limited; $6 million to the successors of the defunct Ulster Bank and $135,530 to the Bank of Scotland.
