A lawyer for bankrupt developer Sean Dunne indicated in court papers filed late last week that his client intends to seek damages from his son John Dunne for turning over more than $12 million (€10.7 million) to the trustee in Sean Dunne's long-running US bankruptcy case.

Attorney Luke McGrath said in the papers that he plans to file a claim seeking "money damages" against John Dunne in state court in New York City, where he lives. Sean Dunne claims that the moneys his son transferred, proceeds from the sale of Walford, Ireland's most expensive home, were intended to benefit his four younger children from his second marriage and should not be used to settle his bankruptcy litigation.

“This case is about the rights of the Dunne children, and the duties owed to them from their half brother, John Dunne,” Mr McGrath wrote in his filing.

In court papers filed late last month, John Dunne said he is unaware of his half brothers having any claim on or interest in the Walford funds, which were held by a special-use vehicle called Yesreb, of which he is the sole director.

“To the best of my knowledge, the Dunne children do not have any interest in the Walford escrow, are not creditors of Yesreb and have no interest in Yesreb,” said John Dunne in a sworn statement filed with the court.

Mr McGrath and John Dunne's lawyer, Sanford Greenberg, did not return calls requesting comment.

In late January, Sean Dunne filed a last-minute request to block transfer of the funds in New York state court instead of in US court in Connecticut where his bankruptcy case has played out over nearly seven years.

That led the trustee to angrily accuse Sean Dunne and his lawyer of "blatant forum shopping". The trustee succeeded in removing the matter to US court in Manhattan and is asking that court to send the case to Connecticut for adjudication. Sean Dunne's lawyer is countering that the case should be returned to state court in New York.

At issue is the €14 million Yesreb received for Walford in 2016. The money remained in escrow for years due to ongoing litigation in Ireland and the US surrounding Sean Dunne's bankruptcy. He still owes creditors hundreds of millions of euros from the collapse of his property empire in the late 2000s.

In June, a US jury found that Sean Dunne had fraudulently transferred assets to his then wife Gayle Killilea to shield them from creditors and ordered her to pay the trustee €18.1 million. Walford was the most valuable of the assets that the jury found had been fraudulently transferred.

The trustee and Ms Killilea have been in settlement talks since last autumn. In early February, an Irish court approved a settlement of litigation related to Walford, under which more than $12 million from Yesreb was transferred to the trustee. The transfer took place on February 4th, the day after the trustee succeeded in getting Sean Dunne's last minute attempt to block it removed to US court.

John Dunne said in his sworn statement that he agreed to serve first as sole shareholder and then as sole director of Yesreb so Ms Killilea, his one-time stepmother, “could effectuate a tax loss”.

“I did not earn any money or benefit whatsoever from this accommodation,” he said in the statement.