Dunne avoids creditor questions after Nama files new legal action against him
State loans agency and Ulster Bank blocked from questioning developer at US meeting
Sean Dunne, right, walks with his attorney James Berman, left, into Federal Court in New Haven, Connecticut USA, for a meeting with creditors yesterday. Photograph: Steve Miller/The Irish Times
Sean Dunne’s biggest creditors were blocked from questioning the bankrupt developer at a meeting in the US following a new legal complaint filed against him by the National Asset Management Agency.
Mr Dunne appeared at a second creditors’ meeting in Connecticut today but avoided questions from Nama and Ulster Bank as his lawyers said that a legal complaint filed by the State loans agency prevented him from answering them.
James Berman, Mr Dunne’s attorney, told Rich Coan, the court-appointed trustee liquidating Mr Dunne’s bankruptcy estate, that there was a risk tthe developer could provide sworn statements out of court “without any safeguards” that could be used against him in Nama’s legal action.
The State loans agency, which has a judgment of €185 million against Mr Dunne, filed a legal complaint on Monday seeking to stop him walking away debt-free with a fresh financial start.
Nama claimed in the complaint that Mr Dunne deliberately, fraudulently and “with reckless indifference to the truth” omitted or misstated information in financial statements he made in his bankruptcy proceedings and at his first meeting with creditors in New Haven, Connecticut last month.
When Nama’s lawyer Tom Curran tried to ask Mr Dunne at today’s hearing about two handwritten agreements dated 2005 and 2008 purporting to transfer certain properties to his wife, Gayle Killilea, the developer’s lawyer directed his client not to answer any questions.
Mr Berman said Nama had alleged Mr Dunne’s affairs were “inextricably linked” to those of his wife and that questions were better answered at a deposition during Nama’s legal action against him.
Asked by lawyers for Nama and Ulster Bank, Mr Dunne’s biggest creditors, whether the developer was refusing to answer all questions, Mr Berman said that “practically speaking”, given the breadth of Nama’s complaint, it should be a “blanket” block.
Mr Dunne’s attorney said they were not going to answer questions from Ulster Bank as Nama and the bank were “joined at the hip.”
Mr Berman described Nama’s legal complaint as “a very thorough, comprehensive complaint,” while Mr Dunne said that it was “not backed up by any substance”.
Mr Coan managed to get answers to some questions in terse exchanges with the developer, who has debts of more than €700 million.
Mr Dunne said from his recollection the quarterly rent paid by the South African government for the rental of their former home - Ouragh on Shrewsbury Road in Dublin - was paid into his wife’s bank account from which she paid the mortgage.
Mr Coan repeatedly asked about the origin of a March 2005 family-law judgment amounting to $44 million that Mr Dunne referred to in financial statements filed in the US bankruptcy proceedings.
Mr Dunne refused to reveal where the judgment was given, citing the in-camera rule. He told Mr Coan an Irish barrister advised him not to provide further information on the judgment in his statements.
The developer challenged Mr Coan’s assertion that he transferred shares in his company, Mountbrook Ireland, to Ms Killilea in 2008. “You are misdescribing it. It is not a transfer. It is a disposal of shares at market value,” said Mr Dunne, adding that other people could take the term “transfer” out of context.
The trustee said at the start of the meeting he had not received various financial documents and information, including passport and visa details for him and Ms Killilea, requested at the last meeting.
Mr Dunne’s lawyer said he would receive some documents today or tomorrow. They objected to Mr Dunne providing certain information outside a deposition as a result of Nama’s new legal action.
Mr Coan adjourned the meeting, which lasted just over an hour, until an unspecified future date.
There was no point in wasting everyone’s time if Mr Dunne was not going to answer questions on his financial statements, assets and liabilities, said Mr Coan.