Court orders Gayle Dunne not to reduce assets below €50m

A judge has granted interim orders restraining Gayle Dunne, wife of bankrupt developer Seán Dunne, reducing her assets below €50 million amid concerns efforts are being made to put her husband's assets beyond the reach of creditors.

Mr Justice Brian McGovern, who presides over the Commercial Court, made the temporary freezing order pending a hearing of further proceedings.

He said there was a strong prima facie case Mrs Dunne and her husband were "involved in an elaborate scheme" to frustrate efforts to administer Mr Dunne's affairs by the court-appointed bankruptcy official in Ireland, as well as those of the equivalent official in the US.

The evidence for much of that case was based on “glaring inconsistencies” in what has been said by Mrs Dunne in court and in documents and in exhibits provided to the court, he said.

Mr Dunne had referred in an affidavit about gifting €60 million in assets to his wife, the judge said. There was also detailed evidence of the lengths the couple had gone to to conceal assets from the bankruptcy official and of “significant” lack of co-operation.

The application by Chris Lehane, the official assignee in bankruptcy, for the freezing order over Mrs Dunne's assets followed the €14 million sale of "Walford", a house in Shrewsbury Road, Dublin, which Mr Dunne says he gifted to his wife in 2005. Walford had been bought by Mr Dunne for €58 million, making it Ireland's most expensive house.

Escrow account

The net proceeds from the sale of Walford, some €12 million in 2013, are to be held in a third-party escrow account until a legal bar on the sale, a lis pendens, is resolved, the court heard.

On Monday, Mark Sanfey SC, for Mr Lehane, said that given what had happened with Walford, his client was concerned there would be nothing for Mr Dunne's creditors at the end of the process.

His side had no faith in a proposed undertaking about putting the Walford proceeds into escrow from the Cypriot company, Yezreb, which had bought the house, counsel said. The money would come out of escrow when the legal problem is resolved.

Mr Sanfey said Yezreb was incorporated in Limassol five weeks before Mr Dunne's bankruptcy and was essentially a "shell" company.

Michael Binchy, for Mrs Dunne, said his client would be fully contesting the claims made against her.

Counsel opposed the interim €50 million freezing order but said he would not oppose one meeting the net value of Walford (€12 million) in circumstances where the money would be in escrow pending further proceedings.

Mr Justice McGovern said he was granting the interim order directing Mrs Dunne not to reduce her assets below €50 million and refused an application from Mr Binchy for a stay on that order.