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Mystery over sale of Princess Diana gowns frustrates owner's creditors

Maureen Dunkel stands next to a dress worn by Princess Diana to a reception for the president of Egypt in 1992.  Dunkel bought 14 dresses owned by the princess in 1997.

STEFANIE BOYAR | Times (2003)

Maureen Dunkel stands next to a dress worn by Princess Diana to a reception for the president of Egypt in 1992. Dunkel bought 14 dresses owned by the princess in 1997.

Remember back in June when Tampa socialite Maureen Dunkel went to Toronto to auction off her 14 prized Princess Diana dresses because she had filed for bankruptcy and needed some money to pay off her debts?

Word now is that it didn't exactly happen that way.

Ten of the 14 dresses that were said to have sold at the Waddington's auction house did not in fact sell. The Sunday Telegraph in London reported this first.

"Turns out it was a bogus, sham deal," Al Gomez, an attorney for the creditors, said Tuesday in Tampa. "The owner of the dresses is still Maureen Dunkel."

True, said Dunkel's Tampa attorney, Jeffrey Warren, but "she's very disappointed that all of the dresses weren't sold."

So what happened?

Waddington's on Tuesday issued a statement of "clarifications" that clarified very little. The statement said three of the dresses sold during the auction and another sold following the auction and the other 10 "failed to meet the reserve price set by the consignor" — Dunkel — "and were 'bought in' by the consignor."

Which four sold? For how much?

"Due to the confidentiality of our client," Waddington's spokesman Vince Ciarlo said, "we are unable to reveal that information."

Dunkel didn't respond to e-mail and phone messages. Her creditors are left to sift through the confusion and hope for the best.

Dunkel, 50, bought the Diana dresses as an investment in June 1997 at an auction in New York. The most ballyhooed piece of her haul was the velvet blue gown Diana wore in 1985 at the White House when she danced with John Travolta.

Then the princess died, in a car crash in Paris, two months after the auction in New York, and Dunkel formed the People's Princess Charitable Foundation to show the dresses to try to raise money for Diana's favorite charities. Expenses were high. Revenue was not.

She tried to get into real estate by investing in a project called the Enclave at Palma Ceia. She got a $1.5 million loan from a corporation called HRH Ventures. She used the dresses as collateral. The market collapsed.

She filed for bankruptcy in January of last year. She decided to sell the dresses and hoped to capitalize on the hubbub surrounding Prince William's wedding.

"Selling the collection," she said in the Waddington's catalogue, "is a poignant and personal event to me."

No audio or video recording was allowed in the auction hall — Waddington's policy — but a reporter from the Toronto Star was there. The reporter listed in an article the "successful bids" for all 14 dresses. Prices ranged from $110,000 to $800,000 for the "Travolta" gown. Most of the sums were for less than what Dunkel and Waddington's were expecting.

After the auction, Stephen Ranger, the Waddington's vice president for business development, told the Associated Press that it would take a few days to compile a final tally of all 14 dresses sold.

The next day, though, Larry Hyman, a bankruptcy trustee in Tampa who went to Toronto to oversee the auction on behalf of the creditors, "was advised by Waddington's that in order to increase bidding, an auction procedure was used wherein it was announced that dresses were 'sold' during the bidding process even though actual bids were not placed on the dresses," Gomez, the creditors' attorney, wrote in a motion he filed last month. The motion continued: "Waddington's informed the trustee of 'fake sold announcements' in order to garner interest in the other dresses."

Gomez also pointed out in the motion that the HRH lien on the dresses had been purchased by an entity associated with Dunkel's husband. David Dunkel is the CEO of the Tampa-based staffing company Kforce.

"In other words," Gomez wrote, "David Dunkel appears to now hold a security interest in the remaining 10 dresses."

That's not a public record, but it's true, according to Mike Horan, a St. Petersburg attorney who used to represent HRH, which no longer exists.

"Obviously," said Peter Bennett, a Tampa architect and builder who is one of the creditors, "she's working on not losing those dresses."

"Not even remotely accurate," said Warren, her attorney. "She was looking forward to having the proceeds that would deal with the various obligations that she's had so she can move on."

Dunkel, Warren said, evidently is going to try again to make money to pay her creditors by showing the dresses in exhibitions. "Those," he said, "are currently being planned."

News researcher Caryn Baird contributed to this report. Michael Kruse can be reached at mkruse@sptimes.com or (727) 893-8751. Follow him on Twitter at @michaelkruse.

Mystery over sale of Princess Diana gowns frustrates owner's creditors 09/13/11 [Last modified: Tuesday, September 13, 2011 10:21pm]
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