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Killilea appeals order to pay nearly €20m to bankruptcy trustee

‘We will aggressively defend the judgment ... We don’t think her appeal has any merit,’ says trustee

Gayle Killilea’s long-time lawyers in the case withdrew in January alleging she had not paid them, according to a court filing. File photograph: The Irish Times

Christopher Hoffman
Sat Mar 12 2022 - 05:50

Gayle Killilea, former wife of bankrupt property baron Sean Dunne, this week appealed a 2019 US jury verdict ordering her to pay nearly €20 million to the trustee of his US bankruptcy.

Ms Killilea's lawyer Patrick Fahey filed the appeal on Thursday with the US court of appeals for the second circuit in New York. She joined her ex-husband Mr Dunne who flied a separate appeal with the same court last year.

Mr Fahey did not return a voice mail seeking comment,

Thomas Curran, a lawyer for the bankruptcy trustee, said on Friday he is confident the court will uphold the verdict

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“We will aggressively defend the judgment,” Mr Curran said. “We don’t think her appeal has any merit.”

Ms Killilea’s appeal comes a week after she handed over €19.5 million in assets to the bankruptcy trustee to secure the judgment from the 2019 civil trial in Connecticut. The assets include proceeds from the sale of Walford, once Ireland’s most expensive home, and $5.56 million (€6 million) in cash.

Mr Dunne moved to the US after his property empire collapsed, and he eventually declared bankruptcy there. Following a nearly month-long trial, a jury found in June 2019 that Mr Dunne had fraudulently transferred assets to Ms Killilea to keep them from creditors and awarded the trustee €18.1 million, a figure that with interest has risen to €19.5 million.

Shortly after the 2019 trial, the couple revealed they had divorced. During the proceeding and since, they have had separate lawyers and at times clashed in court filings.

The nearly three years since the verdict have been marked by on-again-off-again negotiations that failed to produce a settlement and a blizzard of often contentious legal motions from both sides. The trustee eventually convinced US district judge Jeffrey Meyer to order Ms Killilea to turn over sufficient assets to secure the judgment.

Heading for resolution?

The case appeared to be finally headed for resolution last summer when Judge Meyer rejected Mr Dunne’s motion for a new trial. Last month, he rejected the same motion filed by Ms Killilea.

As a a result, the court removed a stay on Mr Dunne’s appeal and ordered his lawyer to file a brief (a written legal argument) by May 12th. The next stage will be oral arguments before a panel of judges.

Federal appeals courts in the US typically move slowly so it will likely be some time before the former couple’s case is decided. If they lose, they would have a final appeal to the US supreme court.

In another development, Ms Killilea’s long-time lawyers in the case withdrew in January alleging she had not paid them, according to a court filing. In a subsequent filing, her new lawyer denied the dispute was over money.

Contacted by text, Ms Killilea did not provide a statement. Mr Dunne’s lawyer could not be reached for comment.

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