Action by Gayle Killilea Dunne cleared to proceed

High Court finds no conflict with US law in case over alleged fraudulent transfer from Sean Dunne

The High Court has ruled proceedings  in Ireland over the alleged fraudulent transfer of assets between bankrupt businessman Sean Dunne and his wife Gayle Killilea Dunne do not conflict with law of the US. Mr Dunne has been declared bankrupt in Ireland and the US.  Photograph: Matt Kavanagh

The High Court has ruled proceedings in Ireland over the alleged fraudulent transfer of assets between bankrupt businessman Sean Dunne and his wife Gayle Killilea Dunne do not conflict with law of the US. Mr Dunne has been declared bankrupt in Ireland and the US. Photograph: Matt Kavanagh

 

The High Court has ruled proceedings brought in Ireland over the alleged fraudulent transfer of assets between bankrupt businessman Sean Dunne and his wife Gayle Killilea Dunne do not conflict with law of the US.

Mr Dunne has been declared bankrupt in Ireland and the US.

Mr Justice Brian McGovern also ruled the Irish proceedings create a legal block that would prevent the trustee overseeing the US bankruptcy from re-litigating the matter in the US courts.

The decision means the High Court will now continue to consider Ms Killilea Dunne’s application to dismiss the fraudulent transfer proceedings brought here by Chris Lehane, the official assignee dealing with Mr Dunne’s Irish bankruptcy.

The case has already been the subject of High Court and Court of Appeal hearings. The appeal court last January ruled Ms Killilea Dunne was entitled to cross examine an American lawyer involved in the US bankruptcy.

As a result of that decision, the High Court re-heard her application to dismiss the fraudulent transfer proceedings on the basis that the US was the appropriate jurisdiction for that matter.

The High Court began re-hearing the matter last month but Mr Justice McGovern was first asked to deal with the issue over whether there was a conflict between the Irish and US proceedings.

In his ruling on Friday, Mr Justice McGovern said that, having considered the evidence of both the lawyer for the US trustee and Ms Killilea Dunne’s own US legal expert, he concluded the US bankruptcy trustee may bring a fraudulent transfer claim in the US.

He was also satisfied that a US bankruptcy judge, and an appeal court there, took the view that in the particular circumstances of this case the Irish official assignee could bring the proceedings in Ireland.

That decision is not in conflict with Irish public policy, Mr Justice McGovern said.

He accepted the evidence of the US trustee’s lawyer that it would be extremely difficult to reactivate the fraudulent transfer case in the US as it had already been discontinued in the US in order to allow the official assignee take his fraudulent transfer case in Ireland.

He also found that once this (fraudulent transfer) case is dealt with here, it created a bar which would bind the US trustee from re-litigating the case in that country.

The case will now continue on a date to be decided, he said.

In the official assignee’s case here, he alleges director’s loans and shares controlled by Sean Dunne in a company called Mavior were fraudulent transferred to Ms Killilea Dunne is an effort to defeat Mr Dunne’s creditors. It also relates to the transfer of the Lagoon Beach Hotel, Cape Town, South Africa and any other assets transferred to her by Mr Dunne under a February 2008 agreement.