After years of litigation involving state, federal, Irish, and (to a lesser extent) Swiss law; transfers of numerous assets, including Ireland’s priciest-personal residence; a jury trial; and extensive post-trial briefing, the Second Circuit made short shrift of a former real estate mogul and his ex-wife’s appeal of a judgment rendered against them for fraudulent conveyances.

Once called the “Baron of Ballsbridge” for his development projects in Ballsbridge, Ireland, Sean Dunne’s real estate empire fell apart after the 2008 financial crisis. Unable to pay debts he personally secured, Dunne and an entity related to the Irish government, National Asset Loan Management, Ltd. (“NALM”), reached an agreement in which Dunne agreed to pay NALM about $235 million. U.S. litigation began in 2012, when NALM sued Dunne, his ex-wife (Gayle Killilea), and various corporate entities in Connecticut state court for fraudulent transfers of Dunne’s assets to Killilea and others. Coan v. Dunne, No. 21-2012, 2023 WL 7103275, at *1 (2d Cir. Oct. 27, 2023).

In 2013, Dunne filed for bankruptcy in the District of Connecticut. The bankruptcy trustee then intervened in the state-court action brought by NALM and removed it to the federal district court. The trustee also initiated adversary proceedings based on Dunne’s allegedly fraudulent transfers, and those proceedings were consolidated in the District of Connecticut with the action brought by NALM.

After years of litigating, the district court oversaw a jury trial in 2021 regarding the allegedly fraudulent transfers leading up to Dunne’s bankruptcy. Of particular note was a property known as “the Walford,” purchased by Dunne in 2005 for €58 million, making it Ireland’s most expensive house. Dunne argued that he did not own the Walford at the time of the allegedly fraudulent transfer, as he placed it into trust for Killilea in 2005. Dunne made similar arguments as to the propriety of various other challenged transfers, including that they were required by a 2005 post-nuptial agreement and a Swiss court’s order on the same.

The jury returned a split verdict but found against Dunne and Killilea on various transfers (including of the Walford) under U.S. and Irish law. Dunne and Killilea challenged the verdict on several grounds, including based on a decision entered by the Irish High Court shortly after the jury returned a verdict. In a dispute between Irish tax authorities and Yesreb Holding Limited (“Yesreb”), a Cypriot entity to which the Walford was transferred, the Irish court found that “Dunne ceased to have any interest in the Walford as of 9 October 2006” and instead had “entered into a contract . . . (purporting to be a trustee for Killilea) with Yesreb for the sale of Walford.” Id. at *2 (cleaned up).

Neither the Irish High Court’s decision nor Dunne and Killilea’s other arguments were enough for the district court to overturn the jury’s findings. Specifically as to the preclusive effect of the Irish court’s order, the district court agreed with the trustee’s argument that “the fact that the Irish High Court reached a [different] conclusion . . . , based on different evidence, involving different parties and concerning different legal issues does not evidence a conflict between Irish and U.S. law or implicate comity.” Coan v. Dunne, 3:15-cv-00050, 2021 WL 3012678, at *16 (D. Conn. July 15, 2021). The court continued that “the principles of comity do not require U.S. courts to negate their own findings or judgments simply because an unhappy litigant is able to secure a later conflicting finding or judgment from a tribunal somewhere else in the world.” Id.

Thus, despite the complex web of transactions, litigation, and entities spanning the globe, the district court found that the jury appropriately rendered a verdict in accordance with the law and the evidence before it. Thus, it ordered Killilea to pay the bankruptcy trustee €19,172,935.60 and $278,297.18. See id. at *35 (denying Dunne’s motion for post-verdict relief); Coan v. Dunne, 3:15-cv-00050 (JAM), 2022 WL 369012, at *7 (D. Conn. Feb. 8, 2022) (denying Killilea’s post-trial motion).

The Second Circuit had little difficulty affirming. After laying out the history of the case and its standard of review, the court’s analysis was simple: “After an independent review of the record and the applicable law, we affirm the judgment entered in the case for substantially the same reasons as those set forth by the district court in its thorough and exceptionally well-reasoned rulings on Dunne’s and Killilea’s post-trial motions.” Coan, 2023 WL 7103275, at *3 (2d Cir. Oct. 27, 2023).

* * *

An endnote for the architecturally or historically curious. Since litigation began, Yesreb sold the Walford property to Dermot Desmond (the billionaire owner of Celtic F.C.) for €14.25 million, a 75% discount from Dunne’s 2005 purchase. The century-old house was subsequently demolished and replaced with a 17,000 square foot mansion “similar to that of a Palladian villa.”