A US judge has denied a request by Gayle Killilea, wife of property developer Seán Dunne, to move a case on alleged fraudulent asset transfers between the couple out of Connecticut's bankruptcy court.
Ms Killilea had asked for the legal action taken by Mr Dunne's trustee, the court official overseeing his US bankruptcy, to be heard by a jury in the Connecticut district court, removing the case from Judge Alan Shiff who has presided over his bankruptcy for more than two years.
She had argued that it would be more efficient for the district court to hear the case because the legal action involved “novel issues of the interplay between Connecticut, Irish and Swiss laws governing fraudulent conveyances, constructive trusts, gifts and family relations”.
Mr Dunne’s trustee objected to the request, saying the Irish couple were reluctant to have the case heard by Judge Shiff because his court was “most familiar” with the background to the case and the parties.
The trustee, Connecticut lawyer Rich Coan, had pointed the district court to the decision of an Irish High Court judge who found that the couple had a "propensity for forum shopping" and claimed this was the reason behind Ms Killilea's motion to move the case.
Mr Coan had argued that Judge Shiff had two years of experience dealing with the case and that to move it would “waste the bankruptcy court’s factual knowledge and legal expertise in the claims”.
The ruling by Judge Jeffrey Meyer in Connecticut District Court last week, is a setback for Ms Killilea in the long-running American legal actions between the couple and Mr Dunne's trustee and creditors.
Mr Dunne filed for bankruptcy in the US in March 2013 with debts of $942 million, about €700 million at the time. He was adjudicated bankrupt in Ireland four months later on a petition by Ulster Bank.
Mr Coan has taken a legal challenge against the developer, seeking to reverse the transfer of €100 million in cash and other assets gifted by Mr Dunne to his wife, claiming the assets had been fraudulently transferred and should be used to repay his creditors.
The bankrupt developer and his multimillionaire former gossip-columnist wife are defending the case, claiming he transferred the money to her when he was worth hundreds of millions of euro.