Bankrupt developer Sean Dunne has been trying to play a "grand scheme of hide the ball" until he can figure out whether he will fare best in the Irish or US bankruptcy courts, a lawyer for the National Asset Management Agency has said.
Attorney Thomas Curran, representing the State loans agency, claimed at a hearing in Connecticut's bankruptcy court that the Co Carlow developer, who has been declared bankrupt in both countries, has continually stalled on disclosing details of his finances for a year.
A lawyer for Gayle Killilea, Mr Dunne's wife, asked Judge Alan Shiff to delay Nama's attempts to seek information about her personal finances from two banks, First Republic and Credit Suisse, and a property agent, Coldwell Banker, which she previously used in a property transaction in the US.
Nama, which has a €185 million judgement against Mr Dunne, served the subpoenas in a case against him in the US court, claiming that Ms Killilea is a front for Mr Dunne on the property dealings. Neither Mr Dunne or Ms Killilea were present for the hearing.
Connecticut attorney Eric Henzy, for Ms Killilea, argued that previous legal cases entitled her to privacy on her banking records and that if the judge was going to allow Nama discover details of her finances, then he should ultimately decide what purchases be disclosed to the State loans agency.
“Where she buys her groceries, and how much she spends on groceries, is not Nama’s business,” Mr Henzy told the judge.
During an hour-long hearing Mr Curran claimed that Mr Dunne had devised a scheme to put his assets into his wife’s name and other entities but that he continued to control them.
Nama wanted to find out whether the developer was enjoying the benefit of money coming out of Ms Killilea’s account – “money that we say he parked in her account,” said the agency’s lawyer.
“It doesn’t matter who she is buying her carrots from,” said Judge Shiff. “If she is buying them for her husband, it does,” replied Mr Curran.
Ms Killilea's argued that the discovery orders against the two banks and property agent should not take place until it is clear how the parallel bankruptcy proceedings in Ireland and the US will proceed.
It could be at least eight or nine months before Nama’s legal action against Mr Dunne proceeds to trial, if at all, and the Irish bankruptcy proceedings could mean the case doesn’t go ahead, said Mr Henzy.
Mr Curran said that he found it “almost laughable” to argue that the trial won’t take place for eight or nine months.
“In this case, that is a nanosecond,” he said. “We have been attempting to get discovery from Mr Dunne for a year and we have received not a shred of evidence.”
Nama would be “up against it” in fighting the trial of its legal action if the judge did not allow the agency’s discovery of Ms Killilea’s financial information now.
The judge reserved his decision in a ruling on Ms Killilea’s application.
Mr Dunne, who filed for bankruptcy in Connecticut in March, will face his creditors at a meeting on December 12th resumed from an adjourned meeting in July.
The Co Carlow developer, who has total debts of more than €700 million, was also declared bankrupt in Dublin in July on an application by Ulster Bank on the back of a €164 million judgment against him.
