Bankrupt property developer Sean Dunne has testified in his American civil trial that he was making real progress turning around his troubled property empire when the National Asset Management Agency (Nama) abruptly put his companies into receivership in July 2011.
“We set out 12 things we hoped to achieve in two years,” Mr Dunne said. “We had actually done very well and achieved nine by April [2011].”
He criticised Nama, which gained control of his assets in the wake of the Celtic Tiger meltdown, for trying to probe the finances of his wife, Gayle Killilea, and his grown children instead of focusing on a business plan to salvage his troubled assets.
Asked by his lawyer Brian Spears how Ms Killilea and other family members reacted to Nama's attempts to access their financial records, Mr Dunne replied: "They were insulted, to put it mildly. Why would they have to get dragged into anything to do with my business? They weren't shareholders. They weren't directors. They weren't guarantors."
Mr Dunne’s wife and relatives refused to co-operate with Nama, and that became a sticking point in his relationship with the agency, he testified.
Creditors
Mr Dunne is being sued in the US district court in Connecticut by the trustee of his American bankruptcy, Richard Coan, in an effort to regain control of millions of euro in assets he gave his wife and distribute them to creditors. The trustee alleges Mr Dunne off-loaded much of his fortune to Ms Killilea in the late 2000s as his companies were failing, to thwart creditors.
The couple deny the allegation, pointing to a handwritten, unwitnessed 2005 “post-nuptial” agreement they signed in which he agreed to give her about 20 per cent of his wealth to assure her independence and provide for their children.
Earlier in the trial, the plaintiffs entered a document into evidence showing that Mr Dunne failed to disclose to Nama the transfer of most of what he gave to Ms Killilea, as was required by the agency, including Walford, a Dublin home purchased for nearly €58 million in 2005.
Not a transfer
Mr Dunne told the jury the house was not included because it wasn’t within the five-year look-back period and it wasn’t a transfer, as he had bought it for Ms Killilea.
In his direct examination of Mr Dunne, Mr Spears sought to knock down a key plaintiff allegation – that Dunne transferred properties, cash and other assets to his wife in the mid-to-late 2000s because he was going broke. As proof of Mr Dunne’s solvency as the transfers occurred, Mr Spears highlighted documents attesting to his high net worth and showing banks still willing to lend him large sums at the time.
Mr Dunne said that he didn’t see the devastating property crash coming. He said he was “shocked, very shocked” when the US investment bank Lehman Brothers collapsed in September 2008, triggering the crisis. Until then, he had been “carrying on business as normal”, he told the jury.
Mr Dunne attributed a turn from huge profits in 2005 and 2006 to ever steeper losses in the following years in part to the completion of many long-standing projects.
Thomas Curran, for Mr Coan, sought to raise doubts about the handwritten 2005 agreement that the couple say governed the asset transfers. Mr Dunne and Ms Killilea both testified that they had discussed a prenuptial agreement with a lawyer who told them Irish law did not recognise such instruments.
Divorce
But, Mr Curran pointed out, the same lawyer said in a letter that such agreements could have some “evidential value” and carry some weight in distributing assets.
Mr Dunne had earlier told the court, that he met Ms Killilea, who is about 20 years younger, at the Galway races in 2002, the year after his divorce from his first wife. She was there as a journalist to cover the event, he said.
The couple exchanged phone numbers and began dating that September, he said.
