Bankrupt developer Seán Dunne has suffered a setback in the US courts after being ordered by a judge to attend court, answer questions and provide all information requested by the trustee managing his case in Connecticut.
In an order issued yesterday, bankruptcy judge Alan Shiff said Mr Dunne must "completely answer all questions posted by the trustee and turn over all documents requested by the trustee without limitation or qualification".
The trustee, Richard Coan, had also asked the bankruptcy court to hold Mr Dunne in contempt, but the judge has deferred ruling on that for now.
Mr Coan said in a court filing in July that the developer “stymies and obstructs the investigation into his financial affairs by picking and choosing which questions he will answer”.
The lawyer said Mr Dunne was alleged to have transferred assets worth tens of millions of dollars to his wife, Gayle Killilea, in an effort to "hinder, delay and defraud" his creditors.
Mr Dunne’s lawyers had directed that he should not answer the trustee’s questions because Nama had filed a complaint seeking to block his discharge from bankruptcy in the US, thus compromising his rights. Mr Coan had argued that this did not provide grounds for avoiding questions and, yesterday, Judge Schiff agreed with him.
He said Mr Dunne could not expect relief from his legal duties because one of his secured creditors had filed an adversary proceeding.
Equally, he said Mr Dunne “cannot rely on alleged Irish law to evade his statutory duties under the bankruptcy code or to thwart the trustee’s efforts to comply with his statutorily imposed duties”.
Mr Dunne’s lawyers had suggested that information requested by the trustee in relation to a $44 million family law settlement in favour of an unnamed creditor was protected by the in-camera rule that applies in Irish family law.
Creditors meeting
Judge Schiff also ordered Mr Dunne to attend the next section 341 creditors' meeting in his case – the developer has previously failed to attend one such meeting and declined to answer questions at two subsequent meetings.
Mr Dunne has been declared bankrupt in the United States and Ireland, owing debts of more than €700 million.
His creditors have not hesitated to pursue him in the US courts, with Nama last month winning permission there to take control of 67 acres of land previously owned by Mr Dunne at Celbridge, Co Kildare.
