United States District Court, D. Connecticut
RICHARD M. COAN, Plaintiff - Trustee,
SEAN DUNNE et al., Defendants.
ORDER RE APPLICATIONS TO RETAIN COUNSEL
JEFFREY ALKER MEYER UNITED STATES DISTRICT JUDGE
Richard M. Coan and defendants Gayle Killilea, Mountbrook
USA, LLC, and Wahl, LLC are at odds over whether the Trustee
may retain two sets of lawyers in connection with the
consolidated proceedings now before the Court and pending
trial in May 2019. The Trustee has applied for permission to
hire the Connecticut firm of Updike, Kelly, & Spellacy,
P.C. (Updike) as special counsel. Doc. #102. The Trustee has
also applied to the Court for permission to hire the Irish
firm of AMOSS Solicitors for necessary assistance in Ireland.
Doc. #104. Defendants have opposed both applications (Doc.
#127; Doc. #128).
deny the application as to Updike and grant it as to AMOSS.
As an initial matter, I conclude that the appointment of
Updike and AMOSS is consistent with the statutory
requirements of the Bankruptcy Code, 11 U.S.C. § 327. As
to Updike, however, I conclude that it has a “former
client” conflict of interest pursuant to Rule 1.9(a) of
the Connecticut Rules of Professional Conduct that prevents
its representation of the Trustee in light of its prior
representation of defendant Mountbrook. As to AMOSS, I
conclude that I have no authority to regulate AMOSS's
participation in any Irish bankruptcy proceedings and that,
to the extent that AMOSS's involvement may extend to any
activities in the case now before me, AMOSS does not labor
under a conflict or other disqualifying interest.
case is a consolidated action involving claims by a
bankruptcy trustee seeking to recover assets relating to the
bankruptcy of Sean Dunne. See In re Dunne, No.
13-50484 (Bankr. D. Conn.). Dunne was a prominent real estate
developer in Ireland with a reported net worth of more than
$900 million in 2007. Doc. #50 at 2. But Dunne soon suffered
devastating financial reversals after the global financial
crisis struck in 2008, and this has set in motion years of
efforts by creditors and bankruptcy trustees in the United
States and Ireland to recover from him.
the government of Ireland created the National Asset
Management Agency (“NAMA”) to acquire troubled
bank assets and other obligations. Ibid. In the
meantime, Dunne and his spouse-defendant Gayle Killilea-moved
to Greenwich, Connecticut in 2010. Ibid.; Doc. #1-1
at 15. In 2012 Dunne consented to a stipulated judgment
against him and in favor of a NAMA-related entity known as
National Asset Loan Management, Ltd. (“NALM”) for
about $235 million stemming from personal guarantees that
Dunne had given to secure debt for his companies.
however, suspected that Dunne had concealed assets from his
creditors, and so NALM filed an action in 2012 in the
Connecticut Superior Court claiming that Dunne had
fraudulently transferred various assets to others including
his spouse Gayle Killilea Dunne (Killilea). Id. at
3. Among the defendants named in NALM's action were
Dunne, Killilea, and a Connecticut limited liability company
known as Mountbrook USA, LLC that Dunne had allegedly formed
but later claimed that Killilea was the sole member. Doc. #1
at 1; Doc. #1-1 at 11-13. Mountbrook was alleged to have paid
real estate taxes on certain properties in Greenwich as well
as to own cars driven by Dunne and Killilea. Doc. #1-1 at 13,
15. NALM's state court complaint alleged that Dunne had
fraudulently transferred his interest in Mountbrook to
Killilea, as well as fraudulently transferred various other
funds and assets including real estate in Greenwich and in
Switzerland. Doc. #1-1 at 16-21.
this state court action was pending, Dunne filed for
bankruptcy in March 2013 in the U.S. Bankruptcy Court in the
District of Connecticut, and his creditors soon commenced a
bankruptcy action against him as well in Ireland. Doc. #50 at
3-4. In January 2015, Dunne waived his discharge in the U.S.
bankruptcy action, and the bankruptcy trustee-plaintiff
Richard Coan-moved to intervene in the state court action and
to remove it to this Court. Id. at 4; Doc. #1. The
Court granted the Trustee's motion to intervene and
denied defendants' motion to remand. Doc. #38.
two months later, the Trustee commenced a separate but
somewhat duplicative adversary proceeding in the Bankruptcy
Court against Killilea and others in March 2015. See Coan
v. Killilea, Adv. Proc. No. 15-05019 (D. Conn.). The
Trustee alleged 35 causes of action based on alleged
fraudulent transfer of assets or money to Killelea from 2005
to 2008, including claims that Dunne had fraudulently
transferred his interests in Mountbrook to Killilea. Doc. #50
years passed before the case became active again on my
docket. On July 27, 2018, I entered an order for trial to
commence in May 2019. Doc. #46. I also granted the
Trustee's unopposed motion to consolidate before me the
removed state court action with the adversary proceeding that
had been proceeding on a separate track in the Bankruptcy
Court. Doc. #52. Parallel and related proceedings are also
taking place in Ireland. See Lehane v. Dunne 2014
7820 P (H. Ct.) (Ir.); In re Dunne (A Bankrupt) 2013
Bankr. No. 2478 (H. Ct.) (Ir.).
Trustee's application to retain Updike
the Trustee is already represented by another law firm, the
Trustee proposes to retain Updike as special counsel to
render advice and counsel to the Trustee in connection with
the trial and any appeal. Doc. #102 at 3. Updike would serve
in a “subordinate litigation role on an ‘as
needed' basis, from time to time, in order to evaluate
certain elements and strategy of the matter and to render
advice and guidance for the preparation and prosecution of
the case, ” including for purposes of strategy for any
appeal. Ibid. According to the Trustee,
“most” of the time to be incurred by attorneys at
Updike would be by attorney Paul Gilmore. Ibid.
Trustee acknowledges that Updike has two prior connections to
entities at issue in this case. The first is Updike's
prior representation of defendant Mountbrook USA, LLC, and
the second is Updike's prior representation of an entity
known as Newinvest Holding International Ltd. (Newinvest). I
will discuss these prior representations in turn.
prior representation of Mountbrook
mid-2016 an Updike attorney named Thomas Gugliotti
represented defendant Mountbrook USA, LLC, as a creditor for
purposes of a bankruptcy proceeding involving 151 Milbank,
LLC, which is a single asset real estate entity owning
property for a luxury condominium project at 151 Milbank
Street in Greenwich. Doc. #102 at 4; Doc. #151 at 12; Doc.
#276 to In re 151 Milbank, LLC, No. 15-51485 (Bankr.
D. Conn. 2016). Mountbrook was the general ...