Sean Dunne abandons bid to walk away from debts of €700m

Property developer Sean Dunne has thrown in the towel on his attempt to walk away from about €700 million in debts through the US bankruptcy courts.

In a major victory for the National Asset Management Agency, his biggest creditor, Mr Dunne has abandoned his bid to seek a fresh financial start

Mr Dunne's lawyer James Berman told a court in Connecticut that the US-based developer had "elected to waive his discharge [from bankruptcy]."

A hearing on whether he should have to hand over financial information to Nama – scheduled to be heard by the court – was “moot,” his lawyer told a US bankruptcy judge.

Mr Dunne’s waiver, coming at a hearing lasting less than five minutes, represents a capitulation by the developer 20 months after he voluntarily filed for bankruptcy in the US, where he has lived since 2010, in an attempt to wipe out debts of $942 million (€700 million).

He sought court protection in the US where bankruptcy is less onerous than in Ireland to pre-empt a petition by Ulster Bank, his second largest creditor, to adjudicate him a bankrupt in Dublin.

Attorney Tom Curran, for Nama subsidiary National Asset Loan Management, said the State agency had no objection to Mr Dunne’s move but requested that a court record be filed making it official.

Mr Dunne had been talking about waiving his discharge from bankruptcy for several months, said Mr Curran, and he wanted a date when the waiver from discharge was “going to happen.”

"It's done – it's on the record," said Judge Alan Shiff, noting the comments by Mr Dunne's lawyer that officially end Nama's legal challenge against the developer seeking to block his discharge.

The developer’s attorney said he had no objection to filing the official waiver of discharge and would do so by the end of the week.

Mr Dunne’s move puts off a potentially lengthy trial on the issue similar to what former Anglo Irish Bank chief executive David Drumm went through in Massachusetts earlier this year.

The State loans agency, which has a court judgment of €185 million against Mr Dunne, brought a legal action against him in the bankruptcy court in July 2013, contesting his right to a discharge. It claimed that he fraudulently transferred millions of euro of assets to his wife, the former newspaper gossip columnist Gayle Killilea Dunne.

Mr Dunne’s move means that he has lost the benefits of bankruptcy and court protection from his creditors but must still shoulder the burden of bankruptcy, having relinquished control of his assets.

The US bankruptcy trustee, the court official appointed to oversee the sale of his assets for the benefit of his creditors, has said that he is still investigating Mr Dunne’s finances and may take action to recover assets transferred to Ms Killilea Dunne for the benefit of creditors.

The developer is now exposed to legal actions from creditors over assets he acquired or income he has earned since he filed for bankruptcy in March 2013 as well as over any future income.

Mr Dunne’s attorney and Peter Nolin, a lawyer representing Ms Killilea Dunne, shook hands with Nama’s lawyers after the hearing.

Nama’s lawyers declined to comment afterwards. A spokesman for the State loans agency also had no comment on Mr Dunne’s waiver.

Ulster Bank had the Co Carlow developer successfully adjudicated a bankrupt in the Irish High Court four months after he filed for bankruptcy in the US in unprecedented parallel insolvency cases.

On Monday the Commercial Court in Dublin agreed to fast-track a dispute with the official administering his Irish bankruptcy over whether Mr Dunne validly transferred assets to his wife.