US court asked to block new trial as Sean Dunne now ‘indigent’

In a fresh court filing, the lawyer for one-time property developer Sean Dunne is asking the court in his US bankruptcy case to reject the trustee's attempt to block a decision on granting a new trial, in part because Mr Dunne is "indigent".

Once one of Ireland’s richest men, Mr Dunne stated in a recent court document that he is broke and has an income of only €200 a month.

In June, an American jury ruled that Mr Dunne fraudulently turned over millions of euro in assets to his now ex-wife Gayle Killilea to shield them from creditors in the wake of the collapse of his property empire. Jurors ordered Ms Killilea to forfeit €18.1 million to the trustee in Dunne's US bankruptcy, whose job is to distribute any remaining assets to his creditors.

Mr Dunne’s lawyer, Luke McGrath, last month filed a motion calling the jury’s verdict inconsistent and at odds with the facts and asking for a new trial or a reduction in the jury award.

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The trustee countered by accusing Mr Dunne of attempting to improperly insert himself into settlement negotiations with Ms Killilea and asking the court to put on hold any decision regarding a new trial.

Memorandum of law

In response, Mr McGrath this week filed a memorandum of law requesting the judge allow his motion for a new trial to proceed. Mr McGrath argued in the document that the trustee failed to show why a stay is justified and dismissed his argument that the motion is premature.

“The trustee’s motion is baseless,” Mr McGrath said in the memorandum. “Dunne has every right to challenge the verdict and to defend himself before this court.”

Mr McGrath also rejected the trustee’s call for a prohibition on further motions regarding a stay because Mr Dunne has not paid a nearly $10,000 sanction the court imposed on him for failing to turn over and preserve certain emails. Mr Dunne has said in court filings that he cannot pay the sanction because he’s broke. The rule cited by the trustee that would ban him from filing further motions does not apply to defendants who are indigent, Mr McGrath argued.

“Dunne is an indigent,” Mr McGrath wrote in the memorandum. “Proof of indigency constitutes an exception to a no-filings order.”

Aggressive campaign

Mr Dunne will be harmed by any delay in considering the motion as the trustee’s aggressive campaign to hunt down and secure Mr Dunne’s and Ms Killilea’s assets is impinging on their ability to provide for their children and hindering his ability to work, Mr McGrath argued.

“The trustee is seeking to restrain monies and assets needed for the education of and care of the Dunne children and, also, seeks to make it impossible for Dunne to make a living,” Mr McGrath wrote in the document.

Timothy Miltenberger, a lawyer for the trustee, declined comment Tuesday. "We'll let our pleadings speak for themselves," Mr Miltenberger said. Mr McGrath could not be reached for comment.