The court-appointed trustee managing the US bankruptcy of Sean Dunne has decided to support Ulster Bank's application to make the property developer bankrupt in Ireland in parallel proceedings.
Connecticut bankruptcy lawyer Rich Coan, who is liquidating Mr Dunne's assets, said that making the developer bankrupt in Ireland would benefit his creditors because all of his properties are in Ireland.
The latest twist in the clean-up following Mr Dunne’s financial demise means that the Co Carlow developer could be declared bankrupt in both the US and Ireland where the bankruptcy regime is more severe.
‘Multinational in nature’
In a filing made in the Connecticut bankruptcy court yesterday, Mr Coan said that, except for a bank account containing $15 (€12) and less than $30,000 of personal effects, more than $14 million of Mr Dunne’s personal property is located outside the US and that the vast majority is located in Ireland.
He described Mr Dunne’s bankruptcy case as “multinational in nature.”
A significant asset – "perhaps the most significant asset"– of Mr Dunne's bankruptcy estate may be claims against Mr Dunne's wife, Gayle Killilea, Mr Coan said, because creditors have claimed that she received "fraudulent transfers" from her husband or is asserting rights to assets she is not rightfully entitled to.
Creditor claims against Ms Killilea "will require substantial investigation and, potentially, litigation in the United States, " the trustee said.
He has asked the Connecticut bankruptcy court where Mr Dunne filed for bankruptcy in March to allow for the appointment of “an Irish estate representative” and negotiation a protocol to decide how to proceed with the handling of Mr Dunne’s bankruptcy for presentation to the US and Irish courts.
“An Irish bankruptcy case is necessary in this matter for an expeditious, economical and just liquidation of the bankruptcy estate and distribution of its property,” Mr Coan said in the filing.
Irish creditors
The “overwhelming majority” of Mr Dunne’s creditors, contract parties and co-debtors are located in Ireland, he said. He argued that the validity of creditor claims against Mr Dunne’s estate would also depend in large part, if not entirely, on the application of Irish law.
Mr Coan noted that Ms Killilea had sought to dismiss a separate legal action taken in Connecticut by the National Asset Management Agency on the grounds that a US court had no jurisdiction to resolve issues between foreign nationals regarding asset transfers that occurred outside the United States.
The rights and interests of Mr Dunne’s “non-insider creditors” must outweigh the interests of Mr Dunne’s wife who is herself an Irish citizen in the US on a three-year visa, the trustee said.
Creditor meeting
On Tuesday Mr Dunne was due to meet his creditors for the first time since filing for bankruptcy in Connecticut, where he now lives, but he filed papers seeking to postpone the meeting after Ulster Bank brought the motion to bring parallel bankruptcy proceedings in Ireland against him earlier this month.
A judge in the Connecticut court is due to hear the bank’s application at a hearing on Tuesday. Ulster Bank, one of Mr Dunne’s biggest creditors, has a judgment of €164 million against the developer.
Mr Dunne blamed Ulster Bank’s attempts to make him bankrupt in Ireland for filing for bankruptcy in the US. He has said in court filings that he has liabilities of $942 million and assets of $55 million.
The bank, which funded Mr Dunne’s ill-fated redevelopment of the Jury’s hotels sites in Ballsbridge, told the court this month that his filing for bankruptcy in the US was a “blatant attempt” to frustrate the laws and jurisdiction of the Irish courts and that his connection to the US was “tenuous at best.”
