Dunne and Killilea will ask US court to strike out Nama action on debts

Nama moved unexpectedly against Dunne and Killilea, his second wife, last July. The couple learned, after the Superior Court in Stamford, Connecticut, had been petitioned by Nama, that the agency had taken legal action against them, three US companies and their lawyers, Thomas Heagney and John Slane of Heagney, Lennon Slane in Greenwich. Nama had made an ex parte application, giving them no advance notice.

The agency had sought a pre-judgment remedy, freezing the couple’s assets, as well as those of three companies, and that of Heagney, a prominent attorney in Greenwich and his Connecticut legal practice.

Nama presented the application using newspaper articles as evidence of Dunne’s transfer of his half-share in an apartment in Geneva to his wife and claims that she had purchased three properties in Greenwich using Dunne’s money – 38 Bush Avenue, 22 Stillman Lane and 42 Bote Road – and that the law firm had acted as trustees.

The transactions ran to millions of dollars, involving the purchase, demolition, renovation and construction of properties.

The State agency claimed the transfer of the half-share in the Geneva property from husband to wife was “fraudulent” at a time when Dunne owed significant debts to his banks in Ireland and to Nama.

When the case came to court again on July 12th last, both sides were represented. Nama made its case, arguing that Dunne was behind the property transactions in Greenwich, that the money was his, and that at least part of that money came from the sale of the share of a Geneva apartment transferred to her.

“This woman was a columnist,” Nama’s attorney, Thomas Rechen, told the judge. “She was a newspaper columnist, a gossip columnist, if you will, in Ireland. One would not expect that she would have the kind of income that would be required in order to purchase the properties that we are talking about in Greenwich.”

Documents

The agency argued that Dunne’s name had cropped up on documents behind some of the transactions. His name appeared on the original purchase agreement for the Bush Avenue property though it was subsequently “crossed out” and Killilea signed it instead, according to Nama.

Dunne’s name appeared as the principal of three US firms set up in 2010 – Mountbrook USA (Dunne’s group of companies in Ireland were called Mountbrook), Barclay Beattie Brown and Molly Blossom. Dunne later said that his name had been listed in error and that his wife was, in fact, the sole member of the companies.

The July hearing didn’t go Nama’s way. Judge Douglas Mintz would not entertain the agency’s request to freeze the couple’s assets. The judge said Nama was seeking “an extraordinary remedy” when the agency had not shown the evidence to prove its claims.

Since then, the case has been going back and forth between the two sides and various depositions have been taken from contractors who worked on the Greenwich properties at the centre of this case.

On Monday, lawyers for Dunne and Killilea will ask a judge to throw out Nama’s case claiming it has no jurisdiction to pursue a legal action in a court in Connecticut or that the agency can argue in a US court that the transfer of a part-share in a Geneva apartment between two Irish nationals living in Switzerland was fraudulent.

The couple have sought to question Nama chief executive Brendan McDonagh under oath. Dunne’s loan portfolio manager at Nama, Kevin Nowlan, who has since left the agency, will be deposed later this month. Next week will be the hearing of the couple’s first major defensive play against Nama.

Speculative development

Connecticut’s property market is ripe for speculative development given how the financial crisis dampened construction work in the area over the past four years.

Being one of America’s wealthiest states, property values never fell as sharply as in other parts of the US but are also unlikely to rise in the recovery. Still, there is money to be made here as there is a shortage of houses to feed appetite among new buyers scouring the leafy suburbs for homes within easy commuting distance of Manhattan.

“We don’t have the inventory we should have here,” said one property agent in Greenwich who didn’t want to be named. “There are opportunities here now and builders are starting to buy land and build ‘spec’ houses.”