Dunne attempt to quiz Nama chief blocked by US court

Judge suggests mediator to resolve discovery issues in hard-fought litigation

File photograph of Sean Dunne, right, with his attorney in New Haven, Connecticut. Photograph: Irish Times photo/ Steve Miller

File photograph of Sean Dunne, right, with his attorney in New Haven, Connecticut. Photograph: Irish Times photo/ Steve Miller

Wed, Jul 30, 2014, 01:00

An American judge has rejected a request by bankrupt property developer Seán Dunne to question chief executive of the National Asset Management Agency under oath.

Connecticut bankruptcy judge Alan Shiff granted Nama’s motion to quash an application by Mr Dunne’s lawyers seeking to depose Brendan McDonagh because they failed to designate the areas they wished to question the State loans agency about and instead designated a person.

‘Premature’ attempt

Judge Shiff said the court rules did not permit Mr Dunne to seek to depose a specific person. He described the developer’s attempt to question Mr McDonagh in a private deposition as “premature”.

The ruling came after the latest court skirmish between the sides in Nama’s legal challenge to try to block Mr Dunne’s discharge from bankruptcy that would allow him to walk away from debts of $942 million (€690 million), including $343 million owed to Nama.

The Co Carlow developer filed for bankruptcy in the US, where he now lives, last year. He was made bankrupt in Ireland four months later following legal action taken by Ulster Bank, another creditor.

The judge noted that Mr Dunne’s lawyers had designated Nama’s chief executive as the person to depose at the agency but Nama’s position was “the CEO in Ireland doesn’t know anything about this”.

Nama’s attorney Tom Curran said this was correct.

“We disagree with that completely,” said James Berman, Mr Dunne’s attorney.

“If they are deceiving the court, you can deal with that as it comes up,” the judge replied.

Mr Berman said he would issue a correct deposition application and attempt to question Mr McDonagh.

Mr Curran complained to the judge that Mr Dunne’s lawyers submitted an 899-page filing in court objecting to the agency’s motion to quash at 8pm on Monday evening, hours before yesterday’s hearing. The judge criticised the late filing of such a large response, telling Mr Dunne’s lawyer that this was “not the way to do business”.

Nama application

On a separate application by Nama seeking to compel Mr Dunne to hand over documents, emails and information, Mr Curran asked the court to postpone the hearing until August 27th when the court is due to hear the status of attempts to resolve another dispute between the parties on a discovery issue.

The judge said the court may need to create a mechanism to resolve disputes over discovery in these heavily litigated proceedings such as the appointment of a “discovery neutral,” an independent party who acts as a mediator between the two sides.

Mr Curran said Nama believed a discovery neutral or “master” would be “very helpful” in moving the case along.

Mr Berman said the two sides should try to resolve their differences first and discuss a discovery master on August 27th. The judge told both sides to be ready to make recommendations to the court on that date to try to resolve the issues.