Sean Dunne’s Irish bankruptcy has been extended by 12 years by the High Court over “wilful and deliberate” failure to co-operate with the trustee administering his bankruptcy, including hiding or not disclosing information about certain assets .
Ms Justice Caroline Costello also ruled that Mr Dunne must pay €7,000 monthly to his Irish bankruptcy trustee to increase the assets available for his creditors.
Ms Justice Costello said Mr Dunne, who was in court, was a “deeply dishonest” witness who clearly told lies about a number of matters, engaged in “wholesale non-compliance” of his statutory obligations and demonstrated an “incredible” attitude.
“I find it difficult to conceive of a bankrupt who could be more obstructive and less co-operative with the bankruptcy process.”
‘No hesitation’
The breaches of his statutory duties under the Bankruptcy Act were "extremely grave, serious, persistent and deliberate". She had "no hesitation" in concluding he had failed to co-operate and had failed to disclose or had hidden information about assets from the official assignee Chris Lehane.
A statement issued by lawyers on behalf of Mr Dunne, after the judgment described the ruling as “extraordinary”. The property developer, who was due to automatically exit bankruptcy in late July 2016, will not now until April 2028.
The statement said he was “deeply disappointed and shocked” and considered the judgment failed to address adequately the very complex issues of dual bankruptcy in Ireland and the United States. He intended to lodge an appeal as soon as possible, it added.
Ulster Bank petitioned the High Court in February 2013 to have Mr Dunne adjudicated bankrupt here after he had defaulted on some €164 million in loans.
A month later, Mr Dunne filed for bankruptcy in Connecticut. He claimed to have debts of $1 billion (€868 million) and assets of $55 million, and a US bankruptcy trustee was appointed by a US court.
The Irish bankruptcy proceedings continued and, in July 2013, the Irish High Court adjudicated Mr Dunne bankrupt.
‘Fully co-operate’
Mr Lehane’s solicitors had written to Mr Dunne on several occasions from July 2013 seeking his full co-operation with the bankruptcy process.
Given his failure to do so, Mr Lehane brought proceedings opposing Mr Dunne’s automatic discharge, due in July 2016, to allow for continued investigations into the bankrupt’s estate.
Mr Dunne vehemently opposed any extension, made various claims against the official assignee and argued any extension would breach his property rights and was an attempt to inflict punishment
The case was heard over eight days by Ms Justice Costello.
In her reserved judgment, she said it was “difficult to conceive of a more thorough determination not to co-operate with the bankruptcy process and to seek to conceal and hide assets legitimately being investigated by the official assignee other than a cynical spurious attempt to preserve the illusion of co-operation in order to achieve a discharge from bankruptcy”.
‘Most duplicitous’
She said she was extending the bankruptcy until April 29th, 2028, three months shy of the 15-year maximum allowed under the Bankruptcy Act in light of Mr Dunne’s age.
She also ordered Mr Dunne to make monthly payments of €7,000 from September 25th last to May 25th, 2021.
From limited information available to Mr Lehane, including credit card statements, the judge said it appears Mr Dunne’s normal personal expenses are being paid other than from Mr Dunne’s salary of $120,000 from his employer Mountbrook USA and €12,000 per year from another company, Amrakbo.
Mr Dunne had said in sworn statements to the court his income is fully expended on legal expenses and he is “not in a position yet to contribute towards the cost of looking after my family”.
Ms Justice Costello said she was making the order on the basis the information before the court is “limited and incomplete”. This was because Mr Dunne had failed to provide the necessary information and, if either side could provide further information, the payment order may be increased or reduced, she said.
Mr Lehane, the judge observed, has described Mr Dunne as the “most duplicitous” bankrupt he had ever encountered and two judges involved in his US bankruptcy had also described him as non-cooperative.
She found him a deeply dishonest witness who remained “unrepentant” during the hearing.
He knew exactly what he was doing and was determined at all costs to conceal as much information as possible from the official assignee whom he had likened to “a bounty hunter”.
This was not the case and Mr Lehane was simply trying to carry out his statutory obligations, she said.
Mr Dunne, she found, had “actively and intentionally” misled the Official Assignee about matters related to the ownership and control of a valuable property, “Walford”, on Dublin’s Shrewsbury Road.
Mr Dunne claims he acquired the property for €58 million in 2005 in trust for his wife Gayle and issues concerning its sale and ownership remain to be decided in other court proceedings.
The judge also described as “at best disingenuous” claims maintained by Mr Dunne over a period that his principal address was a property at Stillman Lane, Connecticut, US, including over a time when that house was unfurnished or had minimal furniture and was for sale.
Mr Dunne had unilaterally decided what information he would provide to the official assignee, what sections of the bankruptcy laws he would abide by and his actions had added greatly to the costs of administration of his estate and therefore impacted on creditors, she said.
His wholesale noncompliance began on the day he was adjudicated bankrupt and persisted until the date of this hearing under Section 85A of the Bankruptcy Act, she said.
