Dunne and Killilea will ask US court to strike out Nama action on debts
38 Bush Avenue
22 Stillman Lane
42 Bote Rd
On Monday, lawyers for the Irish couple will ask a judge to rule that Nama has no jurisdiction in its claims
The security guard emerged from his hut as the taxi pulled up to the barrier. “Back the car up please or I’ll call the cops,” he says at the Mead Point gated community in upmarket Greenwich, refusing to let us pass or to allow photographs be taken of the houses inside.
This area of Connecticut, next to the Atlantic shore, is one of the wealthiest communities on the US east coast in one of the most affluent states in America. Wealthy commuters used to live here and travel into Manhattan for work: nowadays senior bankers at European groups such as UBS and RBS, and hedge fund executives have chosen to live and work here because of the state’s favourable personal tax regime.
Inside this private estate, on Indian Field Road, is the rented home of Sean Dunne, once one of Ireland’s most ambitious property developers, and his wife Gayle Killilea, the former journalist who now – the couple have argued before a Connecticut court – is a property developer in her own right, using money transferred to her by her husband long before the National Asset Management Agency was set up and the Irish property crash wiped him out financially.
Dunne is debtor number 39 on Nama’s books. The debt owing by his DCD Group of companies to the State’s de facto “bad bank” stood at €358 million in December 2010. The High Court ordered him personally to repay €185 million in March 2012 arising over personal guarantees he had given. Not long after, Nama took enforcement seizing control of his business.
The bulk of Dunne’s corporate debts at DCD and his personal debts are held by non-Nama banks, such as the UK-owned Ulster Bank and the former Bank of Scotland (Ireland), bringing his total bank liabilities to almost €900 million. Ulster Bank was the lead lender of three banks that funded Dunne’s most audacious project, the proposed redevelopment of the eight-acre Jury’s hotel site in Ballsbridge that was blocked by An Bord Pleanála. Dunne lost control of the budget hotels he ran on the site last year, handing them over to managers appointed by the banks.
The scale of his debts reflects the activities of one of the State’s most prolific developers. The Carlow man built 3,500 houses in Ireland over a 30-year career and paid a personal tax bill of more than €40 million in 2007, the zenith of the property boom. That was then. Now the money he owes is vast, and it is money that he claims he doesn’t have. Dunne invested much of his own cash in deals, covering about half the peak values of his properties or 50 per cent “gearing”. He has been left deep in insolvency by the crisis.
Nama has, over the past year, taken enforcement action on developers who have either no prospect of surviving financially or who have not co-operated with the taxpayer-owned agency, foreclosing on their businesses. About a third of the agency’s top 190 debtors – who owe the bulk of the €74 billion of bank loans (acquired by Nama for €32 billion, reflecting the drop in property values) – are facing enforcement action. Dunne is one.
The State agency has also taken the fight to developers, identifying those it claims have put assets beyond its reach, reducing the potential sum that Nama can recover from them on behalf of the State.
Nama told The Irish Times this week that it believes it will be able to secure “significantly more” than the €500 million of additional assets from debtors that it previously quoted. This includes assets such as properties, company shares and a variety of personal items transferred to spouses, other family members and third parties.
As of last July, the agency had reversed the transfer of about €160 million worth of assets. A spokesman for the agency declined to say whether it has reversed more since then.
Actions are ongoing. The High Court heard just this week that Nama would receive $205,000 (€153,000) raised from the sale of an 8.38-carat diamond ring at auction in Florida last week. The ring was formerly owned by Mary McCabe, the wife of builder John McCabe, whose companies owe the State agency €235 million.