One-time property mogul Seán Dunne’s long-shot effort to delay distribution of more than $16 million in assets from his decade-plus bankruptcy case in the United States succeeded on Tuesday.
After hearing more than hour of argument from Mr Dunne and lawyers for the US bankruptcy trustee, Judge Julie Manning said she would hold off on approving the final report and distribution of the funds until she reviews the record and rules on issues Mr Dunne raised.
The hearing took place in US bankruptcy court in Bridgeport, Connecticut.
Mr Dunne, who represented himself via video link from Ireland on what he said was his son’s computer, took the rare step of objecting to the bankruptcy trustee’s final report.
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Nick Vegliante, the lawyer for trustee Richard Coan, who has handled Mr Dunne’s bankruptcy since it was filed in 2013 and has since retired, said it was the first time in Mr Coan’s 40-year career that anyone had challenged a final report.
Steven Mackey, an attorney for the trustee’s office, which assigned Mr Coan to the case, argued that Mr Dunne’s challenges to Mr Coan’s appointment and the demand to see his surety bond had been considered and rejected. He argued that the court should immediately approve the report and allow distribution of the funds.
“I think we have beaten the horse to death,” Mr Mackey said. “The creditors have been waiting 13 years. In fact, they’ve been waiting even longer, before this case was filed. It’s time that they be paid.”
But Mr Dunne, looking lawyerly in a dark blue suit and tie, appeared to give the judge pause by arguing that the pending outcome of two cases in the Irish courts could lead to the funds being returned to Ireland, and even to the collapse of the Irish part of his bankruptcy case.
One case involves the $12.5 million proceeds from the sale of Walford, Ireland’s most expensive home, which Mr Dunne alleges was not his but instead held by a trust for his four children with ex-wife Gayle Killilea. The other is his attempt to unseat the official assignee, alleging he was improperly appointed.
“It could be shifted back to Ireland,” Mr Dunne said. “All the creditors are in Ireland.”
Mr Dunne made a fortune in property during Ireland’s heady Celtic Tiger boom, only to see his empire collapse in a mountain of debt after the 2008 financial crisis. Owing hundreds of millions of euro, Mr Dunne moved to the US with his creditors and the Irish government in hot pursuit and declared bankruptcy there in 2013.
In 2019, a US jury ruled that he had transferred €19.1 million to his then-wife Ms Killilea to shield it from creditors. Mr Dunne has been fighting the verdict ever since, taking the case all the way to the US supreme court, which last year declined to hear it.
The trustee’s final report would award $6.1 million to the National Asset Loan Management Limited, a subsidiary of the National Asset Management Agency; $6 million to the successors of the defunct Ulster Bank and $135,530 to the Bank of Scotland.
It would also give Ms Killilea $925,306 and Mr Dunne’s first wife, Jennifer Coyle, $1.9 million.
In addition, the US trustee Mr Coan would receive $693,251 in fees, with almost $140,000 more going to other US lawyers.
