If you were expecting details of Sean Dunne’s financial affairs today, it looks as if you’ll be disappointed. At 8am Dublin time, there is no record of Sean having filed the statements which he needs file, the omission of which has caused the judge to threaten to strike out the bankruptcy filing, and for which Sean obtained one filing-extension already though Sean has requested a hearing before the judge on the statements. They’ll be brought to you here, when they become available.
Meantime, the judge in Sean’s bankruptcy has agreed to the request from the bankruptcy trustee to subpoena Credit Suisse to answer questions and provide documents relevant to Sean’s case. In the order yesterday, Judge Alan Shiff says he’s “determined there is good cause for granting the requested relief”
What this means is that the bankruptcy trustee, Richard Coan – who has been granted additional legal resources by the court already – will question representatives from Credit Suisse at the start of May 2013 and may demand documentation. We still don’t know exactly what the trustee is after but we do know that Credit Suisse is not one of the creditors listed on Sean’s bankruptcy filing, and we do know that Credit Suisse was involved in the transaction which saw a €4m apartment in Geneva, Switzerland bought by Sean’s wife, Gayle and Sean’s name was added as a co-purchaser. That apartment was sold, and it appears to be part of NAMA’s case that the source of funds for the purchase was Sean and those funds rightly belong to NAMA. The Dunnes vigorously dispute NAMA’s allegations.
NAMA Wine Lake 
As a US lawyer, query what the “sic” referred to in the judge’s statement.
@SJ, this maybe a US versus Ireland matter. The bankruptcy trustee applied to the court for an order compelling Credit Suisse units to submit to questioning and to hand over documents. I wouldn’t regard this as a “relief” which I generally regard as a matter between applicant and respondent only. In this case, a third party – not the bankrupt or a creditor – Credit Suisse is being compelled to submit to questioning.
However, I will stand to be corrected by any more qualified in Irish law.
In the US, “relief” refers to granting of what’s requested by order of the court. So in my opinion, “sic” isn’t necessary under US law. A limited, but perhaps in this case, a significant grant of relief. US bankruptcy laws were tightened up @ 8 yrs ago to favor creditors over debtors, so this Credit Suisse issue could well be a loser for the Dunnes, as it seems like a transfer calculated to move assets out of reach of the creditors, which is a huge no-no under US bankruptcy law. Cf Elizabeth Warren’s publications re same.
@SJ, thanks for that, I have taken a look at US definitions of “relief” and will remove the “(sic)”.
It is indeed the case that NAMA allege that the purchase and disposal of the apartment in Geneva, Switzerland involved an unlawful transfer of wealth from Sean Dunne to his wife. This is strenuously denied by the Dunnes.It has not been established that this transaction is something the bankruptcy trustee wants to question CS about, but it is known that CS was involved in that Geneva apartment and that CS does not appear on the SD creditors list.
There was a completely separate legal action in the Connecticut Superior Court where NAMA was pursuing the Dunnes about unlawful transfers, but this has been stayed whilst the bankruptcy is dealt with. The Dunnes deny that any transfers were unlawful, that Gayle Dunne has wealth in her own right and that SD was a wealthy businessman long before his difficulties started in 2007/8 and any transfers were lawful at the time they were made.
Depends on the timing of the transfers. A debtor cannot take advantage of bankruptcy protection if he’s made unlawful transfers within a certain time period. This could be a big issue for the Dunnes, who may have a lot of swagger in Ireland, but given the strict construction of US bankruptcy law in the US, may not convince a judge who is able to look beneath the surface of such spousal transactions.
Given the recent debt/equity deal at INM,were these guys just in the wrong business?
It a little surprising that the required documentation was not prepared and reviewed well in advanc,may indicate that it was done in haste.But he simply has to file them,it’s not negotiable.It would disadvantage his creditors if conducted in private,but not a BK expert.
@SJordan can a US BK be confidential or private-I don’t think so?
@john gallaher: No. Check out Reggie Middleton’s boombustblog.com. He obtained AIB docs because, as he’s said, it’s listed on US stock exchanges.
@SJordan,thanks appeared that the delays could have been part of a plan to keep some documents “private” or out of the public domain.It was my understanding that BK is always conducted transparently and documents are available.Its a little confusing the delay,the required documents would have been prepared for NAMA,immigration,tax returns….the IRS is a creditor.
Familiar with Reggie,he appeared on the Max Keiser show a while back,so far his allegations have not gained much traction.
Reggie looked at AIB docs on the record in the US and found charges not shown on their Irish books. Not sure what you mean about traction: haven’t seen it reported on Irish media, but that’s not surprising.
@SJordan.. “A debtor cannot take advantage of bankruptcy protection if he’s made unlawful transfers within a certain time period”
This is where the rubber hits the road,it was the defense in the other case NAMA V GK,if a debtor is solvent and liquid,they can for estate planning,largesse or to protect themselves from a downturn,set up trusts,transfer assets to spouse,kids etc.Its a problem if its done to avoid or defraud creditors….but what if you were a bit nervous about the market and protected yourself ?
The big question is having provided PG’s,were the creditors noticed of this reduction in net worth….it’s about 10 mil!
Regarding Reggie,it’s all a bit “grassy knoll” national enquirer for me to wade tru…
Can’t credit Reggie’s accounting sleuthing, but I wouldn’t discount it either. I don’t think it’s grassy knoll, but if the SEC gets wind of it (and I think they have), only a matter of time before there’s an investigation (they only look the other way for the big banks). I’d have to look up filing time periods in CT and other relevant jurisdictions, but there’s no excuse (come on, estate planning?) for trying to cheat creditors.
@SJordan,I would hope the SEC has better things to do,it’s a state owned bank in a wind down mode stateside.
Simple,evoke sovereign immunity it was utilized in the IRBC case V FirTree.
The case is before the courts,no one had been found guilty or scolded by the judge yet…..
Wealthy people who are smart often,take a few chips off the table,estate and trust planning is quite a big business. !
Lets refrain from using terns like “cheat” while the case is ongoing.
There may be statue of limitations issues here,jurisdiction and at the very least a presumption of innocence until proved otherwise ……
Enjoyed the exchange,the case will be closely followed on here by NWL,later.
“Cheat” is a US bankruptcy law concept applied to debtors who try to avoid creditors by abusing bankruptcy law. Not my judgment, just trying to be helpful in illuminating aspects of US bankruptcy law, which is quite different even from the proposed insolvency laws in Ireland. Presumption of innocence only applies to criminal cases, at any rate, not to civil cases (anywhere, I believe). Are you a solicitor?
@SJordan,a soccer coach for last hour or two,not a particularly good one either.
Also,not a solicitor,the use of the above term was tongue in cheek-r a dig:)
Will be a interesting BK case,thanks for the responses.