Dunne blames high costs for giving up fight to escape debts

Property developer Sean Dunne has blamed the high costs he faced for his decision to give up his legal fight to walk away from about €700 million in debts through the US bankruptcy courts.

Mr Dunne officially applied to the Connecticut bankruptcy court on Friday to abandon his court bid to seek a fresh financial start.

He submitted a legal document recording his decision to waive a discharge from his debts and the decision was approved by the court.

In the form signed by the developer, Mr Dunne told the court that the cost of defending an action taken by the National Asset Management Agency seeking to block a discharge from his debts was "prohibitive."

“He has come to the conclusion that the cost cannot be justified,” his lawyer James Berman said in the filing submitted on his behalf.

The attorney told the court at a brief hearing on Tuesday that Mr Dunne would not be continuing the fight against Nama to secure a discharge from his debts but did not outline the reason why.

Nama’s attorney Thomas Curran asked the court that Mr Dunne submit the waiver from the discharge of his debts in writing because he had been talking about waiving his discharge for several months.

The new filing, submitted late on Friday afternoon, makes Tuesday’s decision official and means Mr Dunne will avoid a costly trial as he has agreed to give Nama what it sought: a denial of a write-off of his debts.

The State agency has a judgment of €185 million against the developer out of €275 million of debts he has said he owes Nama.

In March 2013, the Co Carlow developer filed for bankruptcy in the US where has lived for the past four years.

Four months later Nama took a legal challenge in the Connecticut court seeking to block his discharge, claiming that he defrauded creditors by transferring tens of millions of euro to his wife.

Mr Dunne and his wife, Gayle Killilea Dunne, the former newspaper gossip columnist, do not deny that the transfers took place but maintain that they occurred at a time when he was worth hundreds of millions of euro and he was legally entitled to make them.

The developer’s finances are still being investigated by his US bankruptcy trustee who has told the court he is considering taking further action to recover assets transferred by Mr Dunne to his wife.

By electing to waive his discharge, the developer is exposed to actions by creditors seeking to recover any assets acquired or any income earned since he filed for bankruptcy 20 months ago. Without the court’s protection, creditors can also pursue him for future income.

Mr Dunne was adjudicated a bankrupt in Ireland last year on a petition submitted by Ulster Bank, which has a judgment of €164 million against him.

The Commercial Court in Dublin has agreed to fast-track a legal action taken by the Irish bankruptcy official overseeing the liquidation of his assets in Ireland on whether the transfers to his wife are valid.