Barry's Tea dynasty's golden moment in battle for business
Published 18/02/2016 | 02:30
The family behind one of Ireland's best-known brands - Barry's Tea - is understood to have won a battle to keep the business under their full control.
A claim secured by AIB over a 9pc stake in the company behind the tea brand, Barry's (Cork), has been discharged by the Commercial Court, ending the spectre of the holding being sold off by the State-owned bank.
In 2010, AIB secured a charge over 90,000 shares in the tea firm that are owned by Donagh Barry, due to money owed to the bank by him following a failed multi-million euro property venture that he was involved in with his brother-in-law, Michael McCarthy.
That venture was otherwise unconnected to the tea firm.
Mr Barry is a son of former Tánaiste Peter Barry - sometimes dubbed the best leader that Fine Gael never had.
The tea firm was founded in 1901, and its later growth was spearheaded by Peter Barry, pictured left, who retired from politics in 1997. His daughter is Deirdre Clune, a Fine Gael MEP, who also owns 9pc of the family firm.
After securing the charge over Donagh Barry's shares in Barry's (Cork) in 2010 on foot of an €8m judgment it had been granted against him, AIB was subsequently granted permission to sell the shares, if it chose to do so.
In 2007, Donagh Barry and Mr McCarthy offered personal guarantees up to a maximum of €8m each to AIB to secure loans amounting to €18m that were advanced by the bank to a company which was then equally owned by the pair - Central Plaza Properties. The most recent company records show that Central Plaza Properties is now solely owned by Mr McCarthy.
Central Plaza Properties intended to use the financing from AIB to develop a site in Mahon, one of Cork's fastest-growing suburbs.
But the project was deemed financially unviable in April 2008, less than nine months after the loans had been secured.
AIB first initiated proceedings against Mr Barry and Mr McCarthy in 2009 after the firm was unable to make interest payments on the loans.
The most recent set of publicly available accounts for Central Plaza Properties - for the 12 months to the end of June 2014 - show it had tangible assets of €28.2m at the time.
But the accounts noted that an agreement was reached in August 2014 to sell the site at Mahon for just €3.5m. The company had almost €22m in outstanding loans at the time.
It's not known what type of arrangement Dublin-based Donagh Barry reached with AIB in order to have the charge over the shares vacated.
His solicitor, Lester Sosa-Villatora of Dublin law firm Wallace Corporate Counsel, declined to comment, as did AIB.
Barry's Tea chief executive Tony Barry was uncontactable.