Gayle Killilea’s lawyer sought to portray her as being firmly in control of assets her husband, bankrupt property developer Seán Dunne, gifted her and of controlling subsequent business activities involving those assets during cross-examination on Wednesday in Mr Dunne’s US civil trial.
For the previous 2½ days, the lawyer for the plaintiff, the trustee in Mr Dunne’s US bankruptcy, used numerous emails and other documents to allege that Mr Dunne remained in charge of assets and business ventures he gave Ms Killilea. In her testimony, Ms Killilea insisted she was in full control and made all final decisions.
Who controlled the various companies, ventures and other assets is at the heart of the trial in US district court in New Haven, Connecticut, now in its eighth day. The trustee alleges Mr Dunne transferred tens of millions of euro in assets to Ms Killilea to shield them from creditors as he was going bankrupt in the mid to late 2000s. He is seeking to return the assets to the bankruptcy estate to pay off creditors.
Ms Killilea and Mr Dunne’s lawyers counter that the transfers were made pursuant to a handwritten, un-witnessed agreement the couple signed in 2005, less than a year after their marriage, when he was still flush. In it, he agreed to transfer a substantial part of his wealth to her. He did so out of love and to secure their children’s future, not to frustrate creditors, their lawyers say.
Peter Nolin, Ms Killilea’s lawyer, told jurors his client could produce as many emails and documents showing that she was in charge of the assets as the plaintiff did in an effort to show the opposite.
South African resort
He elicited testimony from Ms Killilea describing how she turned around the struggling Lagoon Beach resort in South Africa after taking ownership. She clarified that the €4 million in loans that Dunne held on the Lagoon Beach property only had a value of €1.95 million when he gave them to her in 2008.
Mr Nolin also cited documents showing Killilea working with lawyers and accountants to set up complex financial entities and instruments related to her foray into the US property market. He walked Ms Killilea through a laundry list of her US ventures, asking whether Dunne had provided cash for any of them. In each instance, she responded: “No.”
Mr Killilea downplayed profits made from her US real-estate ventures, saying that a series of documents entered in evidence by the plaintiff showing Mountbrook USA netting as much as $1.3 million (€1.16 million) per project did not reflect her true profit. She said she had made less but did not say how much. A project in Manhattan’s Soho district, meanwhile, fell through, while two Greenwich, Connecticut, projects, including a condominium complex, remain unsold because of litigation, she testified.
“I lost a lot of money on that,” she said of the condominium project.
Earlier in the day, Nolin laid out the sale of Walford, a Dublin home that Dunne purchased for nearly €58 million for Ms Killilea not long after they reached their 2005 agreement. The property was sold in March 2013, around the time Mr Dunne declared bankruptcy in the US, to a Cypriot entity controlled by a John Dunne. No money changed hands in the transaction, Ms Killilea testified.
The Cypriot entity sold the property to a third party for more than €14 million in 2016, Ms Killilea testified.
Discussion of the transaction perked up the 10-person jury, whose members have looked bored at times. Five of them took notes as Ms Killilea testified about the sale.
In an apparent response to an email highlighted by the plaintiff on Tuesday in which Ms Killilea worried that Mr Dunne’s various problems could endanger her and her children’s visas, she explained that Mr Dunne had angered Greenwich, Connecticut, building officials, resulting in a stop work order on one of her projects.
“I was quite irritated,” Ms Killilea said.
Dunne is expected to begin testifying on Thursday.
