Embattled property developer Sean Dunne and his wife are facing a fresh legal onslaught in the US as US court officials and Irish State officials have joined forces in a lawsuit against them for the first time.
Mr Dunne's US bankruptcy trustee has restarted a lawsuit originally filed against him and Gayle Killilea Dunne by the National Asset Management Agency in 2012 and moved to a US federal court.
Richard Coan, the court official appointed in Mr Dunne's ill-fated US bankruptcy case to sell off his assets and repay creditors, has teamed up with Nama to pursue the claim against Mr Dunne that he concealed assets from creditors and fraudulently transferred them to his wife.
The trustee argued in new court filings that the action is related to Mr Dunne’s bankruptcy case and that it will help him discover the extent of the developer’s ownership of properties and recover them for his creditors.
On Monday Mr Coan and Nama reopened the case, moving the action, commenced in July 2012 in a state court - the Superior Court in Connecticut - to the US District Court in Connecticut by way of a "notice of removal" filing.
Legal battle
This means the long-running legal battle between Mr Dunne and Nama, which is pursuing the Co Carlow developer over a €185 million judgment debt, has moved to a third US court.
This is in addition to legal actions Mr Dunne is involved in back in Ireland, where he was made bankrupt in July 2013 and faces a separate action in the Commercial Court over asset transfers to his wife.
Nama’s US case - taken to stop Mr Dunne dissipating the proceeds from the July 2012 sale of a $6 million house (€5 million) in upmarket Greenwich that he bought for cash - was put on hold due to his decision to petition for bankruptcy in Connecticut in March 2013.
Mr Dunne last month abandoned his attempt to seek a write-off of his €700 million debts with a discharge from Connecticut’s bankruptcy court.
That decision, coming ahead of a scheduled court hearing on handing over information about his finances to Nama, has paved the way for this latest legal challenge against Mr Dunne.
This action by the bankruptcy trustee and Nama is the first legal move in the US against Mr Dunne since he dropped his bid to be declared bankrupt.
Nama subsidiary, National Asset Loan Management Limited, and Mr Coan are listed as plaintiffs in the new federal court case.
Mr Dunne, a defendant, is joined by his wife, a former newspaper gossip columnist, and four US companies with connections to the couple: Mountbrook USA, Molly Blossom, Barclay and WAHL.
Original complaint
Nama claimed in its original 2012 legal complaint that Ms Killilea Dunne and the companies were suspected of being recipients of assets fraudulently transferred by Mr Dunne. The couple vigorously contested that case, while he claimed in his bankruptcy case that he transferred tens of millions of euro to Ms Killilea Dunne when he was financially solvent.
Greenwich law firm Heagney, Lennon & Slane and two of its partners, Thomas Heagney and John Slane, are named as co-defendants based on Nama’s claims that they held nominal title to several properties in Connecticut bought and renovated with at least $4 million transferred from Mr Dunne and which he in effect controlled.
The trustee had a two-year window from the start of Mr Dunne’s bankruptcy case in March 2013 in which to sue to recover transferred assets.
In Monday’s “notice of removal”, Nama and the trustee said Mr Coan “moved to intervene” in the NALM v Dunne action this week.
Attached to the court filing was Nama’s original complaint against Mr Dunne alleging fraudulent transfers affecting his creditors.
That complaint asserted “causes of action” against Mr Dunne and the other defendants on “several theories of recovery” including fraudulent transfer and “unjust enrichment”, Monday’s notice says.
