Gayle Killilea’s lawyer is asking the judge in her husband Sean Dunne’s American bankruptcy trial to block an order from a different court compelling Killilea’s financial adviser to provide details of the couple’s finances, including the transfer and sale of Walford – once Ireland’s most expensive home.
Trustee attorney Timothy Miltenberger said his client wants to examine Dublin accountant James Ryan to identify assets to pay the $18.1 million (€16.2 million) a jury ordered Ms Killilea to pay the trustee in June. Jurors awarded the funds after finding Dunne had fraudulently transferred millions of euros in assets, including Walford, to Ms Killilea as he was going broke to shield them from creditors.
“Mr Ryan does have intimate familiarity with the Dunnes’ financial affairs,” Mr Miltenberger said. “He’ll be able to tell us where the fraudulently transferred moneys are and assist in collecting the money for the Irish people.”
The trustee's job is to distribute Dunne's assets to creditors, one of the biggest of which is the National Asset Management Agency.
In addition to testimony from Mr Ryan, the trustee is seeking a wide range of financial documents, including the couple's tax returns and all bank and financial records relating to Ms Killilea, Dunne and John Dunne, Sean Dunne's son from his first marriage.
The trustee earlier this month won the order from US Bankruptcy Court, which is separate from US District Court in New Haven, Connecticut, where the trial took place.
The Walford transaction
Ms Killilea's lawyer, Peter Nolin, cried foul in a filing last week, arguing that the trustee had a chance to depose Ryan before the trial but didn't. Mr Nolin, who did not return a call seeking comment, accused the trustee of trying to circumvent the normal discovery process and argued the examination would intrude on attorney-client privilege. He asked US District Judge Jeffrey Meyer, who presided over the trial, to issue a protective order blocking the examination.
“The trustee’s gamesmanship shall not be countenanced,” Mr Nolin wrote. “The (motion) is the latest in a line of (the) Trustee’s longstanding, transparent and repeated abusive discovery efforts to obtain and delve into the Killilea defendants’ attorney-client information and documents through Mr Ryan.”
In his request for the order, Mr Miltenberger says he was uninterested in attorney-client privileged information and focused on Walford, which accounts for $14 million of the award. According to the motion, Mr Ryan played a central role in setting up Yesreb, a Cypriot special use vehicle used to sell Walford, and assisted Ms Killilea in creating a “portfolio lending tax avoidance mechanism.”
“Specifically, the trustee seeks to examine Ryan regarding his assistance in the actual fraud of Dunne, his assistance with Killilea’s portfolio lending tax avoidance mechanism, the Walford transaction, and the location of assets owned or controlled by Dunne and/or Killilea,” the motion reads.
Mr Miltenberger said that the trustee would not serve Ryan with legal papers until Mr Meyer rules on Mr Nolin’s motion. If the papers are served, Ryan may decide to contest an American court’s authority, sending the issue to the Irish courts, he said.
Meanwhile, the trial court has scheduled a telephone-based settlement session for September 19th. A previous mediation attempt failed. Asked if there was any progress on a settlement, Mr Miltenberger replied, “No comment.”
