Tens of millions. An Isle of Man trust. A house in the K Club. A luxury hotel in South Africa. An entity in British Virgin Islands. Trusts and trustees. A money trail and assets valued at more than €20 million.

Court filings in the Isle of Man and in Dublin reveal an extraordinary battle being waged by bankrupt developer Sean Dunne, as he tries to ensure a family trust continues to hunt down tens of millions of euro in assets he believes rightfully belong to it.

In a witness statement filed in the Isle of Man, where his family trust is based, Dunne said that he fears the “devastating consequences” of a family trust and related entities being unable to continue to fund litigation to pursue these assets.

Dunne has said he is taking the case on behalf of four children who are under the age of 18. He wants money from the trust unlocked to pursue the assets. However, the move is being resisted by other family members who contend that the boomtime developer is simply trying to access the funds to pursue his own personal financial agenda.

The Currency has analysed new filings in the High Court by the developer’s son John Dunne, who was part of an application in Dublin to freeze funds within the trust. Combined with new legal papers in the Isle of Man lodged by Sean Dunne, they offer a new insight into what is going on both in Ireland and offshore in relation to assets that were acquired by Dunne at the height of the boom.

Money, assets, debt

Sean Dunne, in a filing over the summer in the Isle of Man, set out a schedule of assets that he believes are owned or due to a family trust called the Sean Dunne Trust along with various related companies which were all set up for the benefit of his four minor sons.

The schedule includes:

• House 9A, K Club (€750,000)
• Proceeds of House 19, K Club (€1.2m)
• CGT Tax benefit (€147,000)
• Cotton loans (£9.3m)
• Bloem/Yesreb Trust Funds (£12.03m)
• Loss of opportunity (£10m)
• Total: £31.3m

While this is a lot of money, it is just a tiny proportion of the wealth Dunne and his family once controlled. To put it in context, KPMG valued Sean Dunne as having “net assets in excess of €500 million” in June 2007. This valuation was just his top 11 commercial property assets in Dublin 2, and Dublin 4, as well as sites in Charlesland, Co Wicklow. It didn’t include assets held through various family trusts such as Walford, the Dublin 4 house that Dunne acquired for record €58 million in 2005. Nor did it include his interests in a luxury hotel in South Africa called Lagoona Beach.

At the peak of the Celtic Tiger, these non-core assets added a further €75 million to the assets controlled by Dunne or Dunne related entities.

In the years after the financial crash, Dunne lost control of all of the assets identified in 2007 by KPMG and they were sold on to others either by Nama, or his other banks.

Dunne went bankrupt in Ireland and the United States when his financial empire collapsed under a mountain of debt. There was however a valuable rump of assets that were controlled by trusts, and not Dunne, and it is this collection of assets that the new ongoing legal battle relate to.

It begins with a house

To understand what is going on today, one must go back to the K Club, the luxury golf resort where Sean Dunne was often based at the weekends during the Celtic Tiger years. 

Last summer the proceeds of the sale of a luxury home in the K Club linked to the Dunne family were frozen in the Isle of Man.

This followed a legal action taken on the behalf of his minor sons by their mother, his former wife Gayle Killilea and one of his non-minor sons John Dunne.

This action froze more than €1 million in proceeds that arose from the sale of a unit 19 Churchfields in the K Club to a local car dealer.

After his former wife, Gayle Killilea and his son John Dunne discovered this property had been sold, they successfully sought an interim injunction freezing the proceeds of this sale in the High Court.

In court, they said in court they feared Sean Dunne planned to use the money for himself rather than the beneficiaries of the Isle of Man trust who are his children.

This allegation was denied by Sean Dunne, who is now seeking to have the interim injunction lifted.

He is seeking to do so because he claims he has “no connection to the trust property” and there is “no specific evidence on the risk of dissipation of assets by me”.

At the same time, he is seeking in the Isle of Man to have a company called Wilton, which oversees the Dunne family trust, removed from any further involvement with it or related companies.

John Dunne, in his affidavit in Dublin, states that if what Sean Dunne has claimed was true, he would have no problem with the injunctions being lifted but “unfortunately this is not the position”.

“Since the proceeds were frozen [of the K Club property] Mr Dunne has instituted proceedings in the Isle of Man,” John Dunne said.

Sean Dunne, he said, had sued both Wilton Trustees (IOM) and Traviata Ltd – which oversee the trust – on the behalf of his children as “their father and litigation friend”.

“As can be seen from those proceedings Mr Dunne continues to attempt to influence how the proceeds of Unit 19, Churchfields are distributed and has done so during the tenure of the interim injunction granted by this honourable court,” John Dunne contends.

John Dunne supplied documents to the High Court outlining the case being taken by his father in the Isle of Man to remove Wilton as the trustees of the company which holds the proceeds of the K Club property sale.

“One of the main reasons why he [Sean Dunne] is seeking Wilton’s removal as trustee is because it has not maintained or progressed litigation Mr Dunne wants to pursue,” John Dunne said.

“Essentially it would appear that Mr Dunne wants to use the trust monies to pursue multi-jurisdictional litigation against several companies, Ms Killilea and possibly the office assignee and the US trustee in bankruptcy [of Sean Dunne],” he said.

John Dunne said he and Killilea believed that the trust money “should be preserved for the genuine benefit of the beneficiaries of the trust”, his four minor children.

He says Sean Dunne “believes that the money should be spent on litigation he has decided to bring in, for example, South Africa and the British Virgin Islands.”

A hotel in South Africa, insolvency fees in Dublin

Sean Dunne, however, has a different interpretation. In Sean Dunne’s legal filings in the Isle of Man, he sets out how he believes the Sean Dunne Trust is owed €9 million in relation to its stake in a luxury hotel in South African called Lagoon Beach.

The litigation John Dunne contends his father wishes to fund is in relation to gaining control of this €9 million, as well as other assets.

In his affidavit, John Dunne also highlights how, in the Isle of Man proceedings, a sum of €25,000 is referred to as being a cost paid to a Kildare company called Rebate Insolvency Solutions.

John Dunne said he could not understand how any of the beneficiaries of the Isle of Man trust, the four minor children of Sean Dunne, could possibly have incurred such as bill as none of the four is insolvent.

“Therefore, it would appear that Mr Dunne is spending trust monies on his own personal issues,” High Dunne claimed.

John Dunne said the fact this money had been paid out supported his claim that Sean Dunne should continue to be “restrained” from accessing the Isle of Man monies.

John Dunne also referenced an email dated November 25, 2020, from Tony Flanagan, a director of Wilton Trustees, to Sean Dunne.

In his email, Flanagan complains that Sean Dunne had “strung us along by getting us to support your desire to pursue litigation without any basis on which we can be paid for the services we provide. This is unacceptable to us”.

The email adds: “During our conversation, you made reference to funds of £28,000 that the structure borrowed from your pension trustee for funding litigation. You reconfirmed that these monies could be used to meet costs associated with the litigation.”

John Dunne said that his father had made “no reference” to these funds in his Irish proceedings and that it appeared at odds with his claim in Dublin that he “cannot fund his defence”.

He alleges that it also appears to be “at odds with his position as a bankrupt”.

Dunne has yet to file a detailed response to this affidavit, but he is expected to deny the allegations being made against him by his son.

A skirmish in the Isle of Man

The legal action to remove Wilton Trustees (IOM) as the trustees of the Sean Dunne Trust began on June 11, 2021, according to Isle of Man court filings, and was first reported in The Currency in early July.

The parties to the case are the four minor sons of Sean Dunne with their father being described as both their “father and litigation friend.” This means he is taking the action on their behalf.

Wilton, according to Sean Dunne, has been the trustee of the Sean Dunne Trust since 2020. He said it also provides directors to four related companies called Cotton Development, Denemre Ltd, Portinscale and Traviata Ltd.

In the action, Sean Dunne contends that there has been “mismanagement of the trust” to the detriment of its beneficiaries.

Wilton, it is claimed, won’t allow the trust to be moved to another provider until certain outstanding fees are paid, fees that Dunne has described as “unreasonable”.

He also claims Wilton is not acting in the interests of the beneficiaries of the trust by not supporting various litigation proceedings in relation to assets he claims it has a right to.

In a witness statement filed in the Isle of Man by Sean Dunne as part of the action to remove Wilton as trustees, the developer explains how he believes that a company called Cotton Developments is owed about €9 million by various entities that owned the Lagoon Beach Hotel in South Africa.

Dunne contends that Flanagan originally offered to finance the litigation outside Ireland. He said the deal that if the deal was successful, Flanagan would receive 15 per cent of the €9 million or 100 per cent of the litigation cost, whichever was higher.

Dunne also claims that Flanagan advised him in relation to litigation he wants to take against the Bloem Trust, a British Virgin Island entity linked to his former wife Gayle Killilea.

Dunne said he ultimately declined Flanagan’s offer as it was “oppressive” and that following this decision, Flanagan became “irate” and issued invoices for the work he had carried out.

Dunne said he believed these fees were “excessive” and refused to pay them.

The Isle of Man proceedings also shows that the sale of the K Club property led to €1.2 million going to the Isle of Man to a bank account overseen by Wilton on the behalf of the Sean Dunne Trust.

Dunne contends that he wants Wilton to step away from its role in the Sean Dunne Trust and related companies and replaced by another company called MannBenham, an Isle of Man-based legal practice.

Dunne said this needed to happen as a “matter of urgency” as the Sean Dunne Trust is required to pursue “litigation in South Africa and the USA regarding substantial assets to the value of in excess of £20 million”.

Dunne also claims in the Isle of Man that his four children are the beneficiaries of another trust called the Bloem Trust based in the British Virgin Islands, and that this too has lost assets. “€14 million of cash has been misappropriated by the children’s mother, Gayle Killilea Dunne, and their step-brother (my son), John Dunne. This matter needs to be urgently addressed,” he said.

Dunne said in relation to Cotten Developments that Wilton had begun a legal action to reclaim £9 million he believes his family trust is owed by various South African companies that run the Lagoon Beach Hotel in Capetown, but that it then stopped doing so.

“There is the potential danger of these proceedings being struck out and these claims lost,” Dunne said.

“The SD Trust urgently needs to take action to recover the funds in the below schedule which are currently owing and/or been misappropriated,” he said. The schedule Sean Dunne is referring to is listed above in this story and totals some £31.3 million.

“The SD Trust also has commercial interests that need to be pursued which will benefit the trust to the value of tens of millions over the coming years and I believe that if the trust is not transferred it could have devastating consequences to the value of the trust assets.”

All of these claims by Dunne are denied by John Dunne and Killilea, who say they are acting in the best interests of the Dunne family, and not Sean Dunne.

*****

Last Wednesday, October 20 marked the 16th anniversary since Sean Dunne shattered the Irish record books by paying €260 million for 4.84 acres in Ballsbridge, Dublin 4 to the Jurys Doyle Hotel Group. I had rung Sean Dunne on his mobile phone around 5 pm that evening from the newsroom of The Irish Independent on Middle Abbey Street to ask him if the story was true.

He had rung back ten minutes later to confirm it and outlined his vision for a new quarter in Dublin. He said he planned to create “a building of aesthetic and architectural value that will economically reflect the price paid for the site.” Later after I filed my story, Dunne rang again.

He was having a few pints in Doheny & Nesbitt’s on Baggot Street to mark the deal and asked me did I want to pop in for one on my way home. When I got there Dunne was surrounded by his bankers standing on the street enjoying the fading sunshine. I remember Dunne predicting one of the bankers sharing a pint with him would go on to shake up Baggot Street, a reference to Bank of Ireland’s headquarters nearby.

Dunne was personable and in good form and told me how after making his first fortune in the suburbs and outskirts of Dublin building residential housing estates, he was now ready for Dublin 2 and Dublin 4. Killilea was there too also happy, and eager to talk about journalism a career she had only left behind her a few years earlier.

At the time I had no idea of the extent of Dunne’s wealth or his debts. As it turns out, he was less than three years away from losing control of his empire, before declaring himself bankrupt in the US in 2013. Dunne came from little but fought his way to the top as a developer. He had a take-no-prisoners approach to business, but even his fiercest critics admitted he was good at developing.

Dunne continues to show that refusal to give up that once propelled him to great fortune. But now he finds himself fighting those he loved, with this final court case all about finding the money to keep going in a battle involving offshore trusts, family, children and more than €20 million.