Gayle Killilea, wife of developer Seán Dunne, has asked a US judge not to refer a fraudulent asset transfer case taken against them to the bankruptcy court where he failed to secure a discharge from his debts.
Ms Killilea, the former newspaper gossip columnist, has also asked the court to remove claims of an ownership interest that Mr Dunne's US bankruptcy trustee has made over two multimillion dollar houses in Greenwich, Connecticut, that the couple claims belong to her.
The houses – Stillman Lane, which the couple have said was their American home, and Milbank – are subject to Lis Pendens notices by the trustee Richard Coan who claims the properties were bought by money fraudulently transferred by Mr Dunne to his wife.
Mr Coan has started a legal action in the Connecticut courts seeking to recover assets for Mr Dunne’s creditors claiming the developer fraudulently transferred tens of millions of dollars worth of assets to his wife on the back of two agreements, in 2005 and 2008.
‘Love and affection’
The Co Carlow developer has said that in 2005 he agreed to give his wife €100 million, a fifth of his fortune at the time, in return for “love and affection” and to give her financial independence.
In a US court filing made in recent days, Ms Killilea disputes the trustee’s ownership claim in all properties she has purchased since then. Rejecting Mr Coan’s case, she claims the assets were transferred “at a time when Dunne was not only solvent but incredibly wealthy.”
Ms Killilea argued that the Lis Pendens notices “effectively cloud” ownership title to the houses and cause “immediate and potentially irreparably harm” to her and two of her companies, Wahl and Milbank.
Bankruptcy court
She filed emergency motions seeking a jury trial in the district court rather than in the bankruptcy court where judge
Alan Shiff
has presided over lengthy litigation between the couple and his creditors.
Noting that the dispute involves “novel issues of the interplay between Connecticut, Irish and Swiss laws governing fraudulent conveyances, constructive trusts, gifts and family relations,” she said that it would be more efficient for the district court to handle the case.
Mr Dunne filed for bankruptcy in Connecticut in March 2013 with debts of $942 million, then the equivalent of €720 million, in response to Ulster Bank's pursuit of a €165 million debt from him in Ireland.
Four months later, he was adjudicated a bankrupt in Ireland on an application by the bank to the High Court.
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