The trustee for Seán Dunne’s bankruptcy application in the United States has said that he has been repeatedly “stonewalled in his efforts” to obtain information from the Irish property developer.
Richard Coan, accompanied by representatives for the National Assets Management Agency and Ulster Bank, told the US bankruptcy court in Bridgeport, Connecticut, yesterday that Mr Dunne, "by his actions demonstrates that he wishes to dictate how his bankruptcy will proceed".
Mr Dunne was not present at the hearing, which addressed Mr Coan's July 19th motions to compel Mr Dunne to testify, to turn over information and documents as required and also to hold him in contempt of court. He advised Judge Alan Schiff that this is a significant bankruptcy case involved $630 million of unsecured debt and that according to schedules he was ordered to submit on July 8th, he showed a combined income for Mr Dunne and his wife Gayle Killilea of $61,000.
“He has already admitted transfers to his wife and not so long ago advised that he had assets of €500 million,” Mr Coan told the court.
He argued that the excuses posited by Mr Dunne’s legal teams included a reference to Irish in-camera family law, “at least one assertion of attorney/client privilege and the assertion that the trustee’s questions “go back too many years”. He said that his requests for copies of the visas, a passport and visa applications belonging to Mr Dunne was granted on condition that he “promised not to reveal them to the creditors” – from Nama and Ulster Bank. He also said that a request for further information from Irish counsel on the particulars of the in-camera law cited by Mr Dunne’s legal team has not materialised.
“I have yet to see anything on paper to demonstrate the Irish in-camera laws.
Thomas Curran, appearing for Nama, also expressed unhappiness with the creditors meeting, stating that “No one, including the trustee, can identify state assets unless the debtor complies with transparency and disclosure – and he [Mr Dunne] has not and will not unless forced to. Hank Baer, representing Ulster Bank, stated that their questioning of Mr Dunne had been limited to one or two follow up questions. Mr Coen suggested Mr Dunne should be responsible for reimbursing the state (of Connecticut) for the cost of the action.
Legal counsel for Mr Dunne denied their client had been anything but co-operative during the course of the bankruptcy 341 meeting. In explaining why Mr Dunne had been instructed not to answer specific questions at the previous meeting on July 17th, James Berman explained that an adversary proceeding, filed by Nama on July 15th, had compromised their client’s rights.
“A 341 is not the forum for taking discovery on an adversary proceeding. There is a fair way to get that information and that is not a fair way.” He argued that the adversary proceeding meant civil procedure should apply and cited the 2004 inquiry examination, which by case law must yield to the safeguards of an advisory procedure.
When asked by Judge Schiff if he could support his argument with case law, Mr Berman conceded that he could not provide state law. Judge Schiff reminded Mr Berman that it was Mr Dunne’s decision to file the Chapter 7 bankruptcy document and therefore must comply with its terms. “He shouldn’t be able to stonewall creditors and the efforts of the state to compel him.”
Judge Schiff said he would search hard “to see is there is a thread of case law” to support Mr Dunne’s legal position before advising on his decision.
