Bankrupt developer Sean Dunne failed to disclose to Irish Nationwide his reason for seeking a multimillion euro loan to complete the purchase of the Shrewsbury Road house Walford, saying he would only reveal the true purposes in a "doomsday" scenario, a court in Connecticut heard last week.
Evidence presented at the ongoing trial involving Mr Dunne and his wife Gail Killilea, showed that the Carlow-born developer misled Irish Nationwide boss Michael Fingleton about the true purpose of the loan.
Though Mr Dunne purchased Walford in 2005 for a record €58 million, he paid the outstanding balance on the house in the summer of 2006.
"When you made the final payment for Walford at end of June 2006, you didn't' actually have the money to pay," Thomas Curran, counsel for the trustee in Mr Dunne's American bankruptcy, said in court. "At the time you wrote the cheque, you didn't have the money in your account."
Mr Dunne replied that the Whitewater Shopping Centre project in Kildare had taken a lot longer to close than expected. “I required a short-term facility, paid back the minute Whitewater closed . . . I had clearance from Irish Nationwide that they were going to give me the money.”
When it was put to him that he did not tell Mr Fingleton why he needed the advance loan, Mr Dunne replied: “No, that’s incorrect.”
Shielded assets
But counsel for the plaintiff then produced a memo dated July 6th, 2006 in which Patrick Sweetman of Matheson Ormbsy Prentice claimed that Mr Dunne had said he would not tell Mr Fingleton the true purpose of his loan request.
“Sean mentioned to me that in a doomsday scenario he would tell Michael Fingleton the actual purpose for which he needs the money and on that basis would have no difficulty in getting the money,” Mr Sweetman wrote.
He said that Paul Gallagher, senior counsel, had advised him to impress upon Mr Dunne "just how serious the matter was."
“I advised Sean that he should not delay but to immediately advise Michael Fingleton as to what he wanted the money for so that the funds would definitely be available to meet the cheque,” he wrote.
When Mr Curran put it to Mr Dunne in court that he had, in fact, kept the information from Mr Fingleton, Mr Dunne said that it had happened “nearly 13 years ago”.
“I believe I did tell Michael Fingleton,” Mr Dunne said.
US trustee Richard Coan is suing Mr Dunne to retrieve assets that he believes the developer and his wife, Gail Killilea, shielded from creditors, including Nama and Ulster Bank. The case resumes on Tuesday.
A ‘ruse’
The court case has shone a light on Mr Dunne's financial affairs in the run-up to the financial crisis, including the pressure he was coming under from lenders and creditors in 2007. Among the evidence produced during the trial was a letter from August 2007 from Bank of Ireland demanding payment of a loan, and a letter from KPMG in late 2008 demanding €1.4 million in fees.
“I am not prepared to work needlessly and to the bone and for 16 hours a day for the next couple of years for other people,” one letter Mr Dunne wrote to KPMG in late 2008 stated.
Counsel for the trustee put it to Mr Dunne that, during this period when banks and creditors were demanding payment, “you were giving away and transferring millions of assets to your wife”.
This included a transfer of almost €1 million in July 2007 to a joint account he held with Ms Gillilea to purchase an apartment in Switzerland.
The court also heard that, after filing for bankruptcy in 2013, Mr Dunne deleted two Gmail accounts. Mr Dunne said it was because he was being hacked.
Mr Dunne also told the court that Nama’s demands for him to produce a statement of affairs was a “ruse” to get information about his wife and family.
“I knew it was a ruse, my family l knew it was a ruse,” he said, adding that his bankruptcy was “being used to get information on my wife and children”.
