The decade-plus American bankruptcy of property developer Sean Dunne took a major step toward final resolution on Tuesday, after a US judge allowed payments to his two ex-wives.
US bankruptcy Judge Julie A Manning approved, pending the filing of revised paperwork, more than $2.8 million in payments to Mr Dunne’s two ex-wives. She added she would also rule by Friday on distribution of the remainder of the more than $16 million in the estate.
Under the decision, Mr Dunne’s first wife Jennifer Coyle will receive $1.9 million and his second, Gayle Killilea, $925,306.
Ms Killilea did not respond to a text message seeking comment.
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Judge Manning made the ruling during a hearing at U.S. Bankruptcy Court in Bridgeport, Connecticut.
[ Seán Dunne loses appeal over challenge to bankruptcy officialsOpens in new window ]
The bankruptcy trustee this autumn issued final report distributing the estate’s remaining assets, but Mr Dunne took the rare step of filing a formal objection. Mr Dunne, representing himself via video link from Ireland, argued in an October hearing that two cases pending in the Irish courts could upend and even lead to dismissal of his bankruptcy.
Judge Manning agreed at that hearing to delay distribution while she considered Mr Dunne’s objections.
The trustee filed a motion late last month seeking to distribute moneys designated for Ms Coyle and Ms Killilea in order to avoid taxes the estate would have to pay if its proceeds were not paid out by year’s end.
Mr Dunne did not file an objection to the motion. He was to appear at Tuesday’s hearing via video hook up but did not, e-mailing the court that he was about to lose wifi access.
“These folks have waited years and years for this,” said Nick Vegliante, lawyer for trustee Richard M Coan, who has handled Mr Dunne’s bankruptcy since it was filed and has since retired. “We would like to get this taken care which would have the additional benefit of resolving tax liability.
In arguing in favour of the distributions, attorney Henry Baer, representing Ulster Bank and the National Asset Loan Management Limited, noted that since the hearing Mr Dunne had filed fresh litigation against Ireland’s attorney general, finance minister and “the country of Ireland itself.”
“It’s been going on for 15 years,” Mr Baer said of litigation over Mr Dunne’s massive debts. “I fear, your honorhonourwe don’t enter the order soon as we wait for the litigation Mr Dunne pursues, we will be here for the 26th anniversary.”
Judge Manning agreed, noting Mr Dunne could not seek discharge of the distributions to his ex-wives even if the bankruptcy were thrown out, as he is seeking. She said she would order release of the funds contingent on Mr Vegliante submitting a revised motion that includes more legal backup.
Mr Dunne was among the Celtic Tiger’s highest flyers, amassing a real estate empire worth hundreds of millions of euro. That empire collapsed during the 2008 financial crisis, leaving him massively in debt. He moved to the United States and filed for bankruptcy there in 2013. He was declared bankrupt in Ireland the same year.
In 2019, following a nearly month-long civil trial, a US jury found that Mr Dunne had improperly transferred $19.1 million to his then-wife Ms Killilea in a scheme to shield it from creditors. He has been fighting ever since to overturn the verdict, taking it all the way to the US Supreme Court, which refused to hear it, and stop distribution of the funds.
Judge Manning said she would rule on releasing the remaining assets by Friday. Per the trustee’s final report, they would include: $6.1 million to the National Asset Loan Management Limited; and more than $6 million to Ulster Bank and Bank of Scotland.
