Seán Dunne is seeking a US injunction against his son to prevent him from accessing €14 million the bankrupt developer believes is to be used to help settle the legal liabilities of Mr Dunne's former wife, Gayle Killilea.
Mr Dunne's lawyer, Luke McGrath, asked a New York court late on Thursday for a temporary restraining order and a preliminary injunction preventing his son John Dunne from accessing funds realised from the 2013 sale of Walford, once Ireland's most expensive home, to settle the legal case.
The money is in a Cypriot special-use vehicle called Yesreb of which US-based John Dunne, Seán Dunne’s son from his first marriage, is the sole director.
The trustee of Mr Dunne’s US bankruptcy sued him and Ms Killilea alleging that he had transferred millions in euro in assets, including the proceeds of the €14 million Walford sale, to her in a scheme to evade creditors.
Last June, a jury agreed following three-week trial in US district court in New Haven, Connecticut and ordered Ms Killilea to surrender €18.1 million to the trustee. The couple has since revealed that they are divorced.
John Dunne is also a defendant in the US case.
Court papers
In the latest court papers, Mr McGrath said the money concerned in the injunction application should go to Mr Dunne’s four children from his marriage to Ms Killilea, all of whom are minors, instead of to settle the case. Two of the children live full time with Mr Dunne, while the other two split their time between the ex-spouses, according to court papers.
“If the specific fund is depleted, transferred and spoliated – including being used to fund [Ms Killilea’s] settlement, the Dunne children will be robbed of the benefits owed them,“ Mr McGrath said in court papers.
“Accordingly, the only just and fair resolution here is that the Specific Fund not be used to fund [Ms Killilea’s] settlement, that [Ms Killilea] pay for [her] settlement with her own funds (of which she has ample), and that the monies set aside for the benefit for the Dunne children remain in Yesreb.”
Mr McGrath wrote in his filing that Ms Killilea told Mr Dunne she intends to use the money in Yesreb to settle the case. He said in court documents that “upon information and belief” a settlement is expected this week or next.
Mr McGrath did not return a call requesting comment on Friday. Peter Nolin, US lawyer for both Ms Killilea and John Dunne, declined to comment. The trustee’s law firm also declined comment.
A hearing on the matter has not yet been scheduled.
Walford proceedings
Separately, in the High Court in Dublin on Friday, it emerged that Mr Justice Denis McDonald would next Wednesday begin hearing proceedings concerning Walford.
The High Court proceedings are by Seán Dunne's Irish bankruptcy trustee Chris Lehane against Yesreb.
Yesreb sold Walford to Celtic Trustees Ltd, the sole trustee of the Merdon Trust and whose settlor is financier Dermot Desmond.
Mr Lehane’s proceedings against Yesreb, with Celtic Trustees as notice party, concern the sale of the property.
Mr Dunne was declared bankrupt here and in the US in 2013 over debts of €164 million.
His Irish bankruptcy has been extended for 12 years over failure to co-operate with Mr Lehane.
Mr Lehane claims Mr Dunne had an involvement with Yesreb and Walford must therefore still have had a connection to the family.
The Dunnes initially denied having any connection with Yesreb but later asserted it had been owned by John Dunne, having been gifted to him by Ms Killilea.
