Gayle Killilea fails in US court bid to block financial examination

Seán Dunne bankruptcy trustee is seeking to interview adviser over whereabouts of assets

Seán Dunne  leaving the US Federal Court House in May after giving testimony in his civil financial fraud trial. Photograph: Douglas Healey

Seán Dunne leaving the US Federal Court House in May after giving testimony in his civil financial fraud trial. Photograph: Douglas Healey

 

The judge in developer Seán Dunne’s US bankruptcy this week denied a request by his wife Gayle Killilea’s lawyer to block examination of her longtime financial adviser and production of a wide range of the couple’s financial documents.

Timothy Miltenberger, attorney for the bankruptcy trustee, said he has already reached out to attorneys in Ireland to arrange an interview with Dublin accountant James Ryan and production of documents held by him. Mr Ryan could choose to challenge the order in the Irish courts, Mr Miltenberger has said.

The trustee, who is charged with distributing Mr Dunne’s remaining assets to his creditors, wants to question Mr Ryan about the whereabouts of Ms Killilea’s assets to assure payment of an €18.1 million judgment rendered by an American jury in June. Jurors ordered Ms Killilea to pay the trustee the money after hearing three weeks of testimony and concluding that Mr Dunne had fraudulently transferred millions of euros of assets, including Walford, Ireland’s most expensive home, to Ms Killilea to thwart his creditors.

Ms Killilea’s lawyer, Peter Nolin, who had asked US district judge Jeffrey Meyer to issue a protective order blocking the examination and the turning over of the documents, declined comment.

In contempt

In another development, the trustee on Thursday asked Judge Meyer to order Mr Dunne to demonstrate why he should not be found in contempt for failing to pay a $9,330 sanction. Last spring, Judge Meyer ordered Mr Dunne to pay the trustee that amount after finding he had failed to preserve and hand over to the trustee all emails related to the case. The money is to cover the trustee’s litigation costs to get the emails.

Mr Dunne was originally supposed to pay the trustee by June 7th, according to the filing. The trustee granted multiple extensions, but Mr Dunne still has not paid the sanction, court papers say.

Mr Dunne’s lawyer Brian Spears did not return a call requesting comment on Thursday. Trustee attorney Tom Curran declined to comment.

The trustee originally asked Judge Meyer to find Mr Dunne in contempt over the emails earlier this year. Judge Meyer declined, concluding evidence that the developer had wilfully violated a court order “inconclusive”. He nonetheless found Mr Dunne’s actions wanting, writing that “it is still clear that Dunne negligently failed to preserve relevant electronic information and that he should be subject to appropriate sanctions”.

Transfer of Walford

At issue was Mr Dunne’s destruction of emails in 2012 and 2013. Some related to the transfer of Walford, which the jury later found was fraudulent, according to court papers. Mr Dunne said he did so because, even though litigation was under way, no one had requested them, according to court papers. He also noted that Walford did not appear to be an issue at the time, court papers say.

Judge Meyer wrote that Mr Dunne should have “reasonably anticipated” that emails related to Walford would become relevant to the litigation and he therefore “had a duty to preserve them”.

In addition, the trustee obtained emails sent by Mr Dunne and others to other parties that should have been, but were not, among those turned over for the trial, court papers say.