Bankrupt developer Seán Dunne’s son by his first marriage has testified that, aside from a gift of some apartments when he was a boy and some pocketmoney during his college days, he has received nothing of value from his father.
John Dunne also denied that his father controlled any of his assets or possessions or that he is hiding any assets for him.
He is accused, along with his father and his father's second wife, Gayle Killilea, of scheming to transfer Seán Dunne's assets to family members to shield them from creditors. The trustee in Seán Dunne's American bankruptcy is suing them in US District Court in New Haven, Connecticut to claw back tens of millions of dollars in assets so they can be distributed to creditors, including the National Asset Management Agency (Nama) and Ulster Bank.
During cross-examination, the plaintiff's lawyer Thomas Curran noted that Mr Dunne told Nama in a January 2011 email enquiring about his assets: "I do not believe I have any net worth."
Mr Curran then pointed to documents showing three years later, in 2014, a company for which John Dunne was the shareholder controlled a Cypriot bank account containing more than $11 million. Mr Dunne, however, denied having any control over the money.
Cypriot entity
The funds related to the sale of to the sale of Walford, a Dublin home his father has testified he purchased for Ms Killilea for €58 million in 2005. John Dunne explained that Ms Killilea had asked him to serve as shareholder of a Cypriot entity called Yesreb that would purchase the house. She needed a non-blood relative to claim a tax deduction, he said.
Ms Killilea loaned the entity €15 million to carry out the transaction and would receive the money back when the house sold to a third party, with any proceeds over that amount to be shared with her husband's children, he said. The transaction took place the same month her husband declared bankruptcy in the United States.
The property eventually sold for €14 million, but there was no profit left over after various fees were paid, so he received nothing, Mr Dunne testified.
Mr Dunne also testified that he held a 20 per cent interest in Ms Killilea’s venture to redevelop a property in Manhattan’s Soho district. He explained to the jury that Ms Killilea gave him a $1 million loan to buy into the project. He said he used the apartments his father had given him and his siblings when they were children as collateral. He later sold off the apartments to pay off Ms Killilea and secure his interest in the venture, he testified. They later sold the Soho property for a profit.
Agreement
Mr Curran noted that John Dunne and Ms Killilea said they reached the agreement in March 2013, the same month Seán Dunne declared bankruptcy, but they didn’t put it into writing until a year later. The timing “had zero to do” with his father’s bankruptcy, John Dunne told the jury.
Under direct examination, John Dunne confirmed that he witnessed a handwritten 2005 trust agreement stating that his father was buying Walford for Ms Killilea, which serves as the basis for the couple’s claim that the home always belonged to her. He was 17 at the time.
Mr Dunne told jurors that he lives in New York City and remains an employee of Ms Killilea's American property development company, Mountbrook USA.
The case is expected to go to the jury some time next week.
