The 24 hours that changed O'Connell Street
A series of transactions, some undertaken in the small hours of the morning, resulted last year in 460 people losing their jobs overnight when Clerys was sold by its American owners and promptly ended up in liquidation. Now a major High Court battle is being fought between companies linked to the sale of the landmark store and inspectors from the Workplace Relations Commission who are conducting an investigation into collective redundancies
A little over a year ago, a number of Clerys staff staged a sit-in at the landmark Dublin store that had been their workplace. They had lost their jobs after the company behind the store was abruptly put into liquidation.
The closure of the venerable old lady of O'Connell Street attracted intense negative publicity, with Irish businesswoman Deirdre Foley at the centre of it all.
The Sligo woman (who British trade magazine Property Week labelled an 'Alpha Female' in 2013 - shooting is listed as one of her hobbies on her company's website) had until then had a relatively low profile compared to peers such as Johnny Ronan, Michael O'Flynn and Sean Dunne.
A first-class honours commerce graduate from NUI Galway, Foley joined KPMG in 1992 and qualified as a chartered accountant.
Later she worked with Derek Quinlan, the tax collector turned property player who amassed a glittering portfolio that included Claridge's and the Savoy hotels in London, as well as multiple properties on Dublin's leafy Shrewsbury Road.
Then she went out on her own as the chief executive of D2 Private, a real estate investment and finance company - active in the Irish market since around 2006 - that bought Clerys in tandem with London-based Cheyne Capital Management, via a joint venture vehicle called Natrium.
Her side of the story goes like this.
In January last year, Gordon Brothers, the Boston-based investor that bought Clerys out of receivership less than three years earlier, began looking for a buyer. They hired IBI Corporate Finance - one of the top deal-making firms in town - to help out.
A number of parties were interested but Natrium ultimately prevailed. The deal was completed in the early morning of June 12, 2015.
Natrium bought OCS Investment Holdings, the parent of OCS Operations, which was the company behind the retail arm Clerys. A separate company, OCS Properties (OPL), owned the O'Connell Street property - a corporate arrangement that is legal, but has attracted much criticism.
As part of the deal, a number of OCS directors sought to resign and Natrium appointed experienced insolvency practitioners Jim Brydie and Eamonn Cooney to become the directors of OCS Operations.
Brydie has previously sworn an affidavit saying their expertise in insolvency was the reason they were appointed.
Shortly after the sale, the shares in the Clerys operating business - OCS Operations - were transferred to Jim Brydie for €1.
That day, Brydie and Cooney wrote a letter to OCS Properties Limited (OPL) - the company that owned the Clerys building. The letter, marked private and confidential and delivered by hand, is now available on the Department of Jobs website.
It says OCS Operations' lease on the Dublin property had expired as of March but that it had remained in situ with the knowledge and consent of OPL.
"It is clearly in both the company's and OPL's interest that the company's occupation of the property is reflected in a formal lease governing its terms. Accordingly, please confirm by return if OPL is willing to grant a formal lease to the company of the property and for what terms," it continues.
A three-sentence reply from Foley was sent the same day on behalf of OPL.
"Dear Sirs, We have received your letter of today's date requesting confirmation by return as to whether we are willing to grant you a further lease of the property known as Clerys Department Store and Warehouse (the property) currently occupied by you under an expired letting agreement."
"We are writing to inform you that we are not prepared to grant you any further lease or letting agreement of the property and await hearing from you regarding your plans to vacate.
"A formal Notice to Quit will be served in due course, if necessary."
Brydie asked the High Court the same day for the company to be placed into liquidation, having come to the conclusion that it was insolvent.
The petition was granted and Clerys was gone amid a massive outcry.
Minister for Jobs Richard Bruton commissioned a report, which concluded that "while the transaction that produced this result may have been lawful, it is difficult to avoid the conclusion that it would be preferable if it were not."
The Workplace Relations Commission (WRC) began investigating too, and that's the root of the current court action that saw Foley heckled by a former Clerys employee last week.
The WRC is a statutory body that came into being last year. It is now responsible for the functions of the Labour Relations Commission and the National Employment Rights Authority.
It began examining whether an offence had been committed under the Protection of Employment Act 1977, which says that when an employer decides to impose collective redundancies, they have to begin consultations with employee representatives at least 30 days before the first dismissal takes effect.
The then Tanaiste and Minister for Social Protection Joan Burton told the Dail that Clerys workers were not afforded their basic entitlements in that regard.
"The people who are shamed and disgraced by what has happened in this case are those who took part in the arrangements to do this," she added.
WRC inspector James Kelly arrived at D2's offices on Harcourt Street in Dublin on May 19 this year, with gardai in tow.
He believed documents relevant to his investigation were being held there, and in particular was interested in a computer "that may have been operated by Deirdre Foley or [D2 employee] Mark Redmond".
The seizure of the computer is at the heart of the current court proceedings. Foley claimed in a sworn statement that the inspectors had accessed legally privileged material, and they had forwarded material from the laptop while trying to erase the evidence of doing so.
She believes the inspectors are "engaged in a far-reaching exercise in accessing information and materials which have no relevance to their investigation and which exercise is not supported by their statutory powers."
As far as Foley is concerned, she and D2 are not the proper subjects of the WRC investigation into whether an offence was committed.
She says OCS Operations was the Clerys workers' employer - not her. She also says the decision to put the company in liquidation can only have been made by the people in a position to do it - the directors of OCS Operations, Brydie and Cooney.
The Protection of Employment Act says that when an offence is proved to have been committed under it "with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other officer of the body corporate or any person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence."
Foley says she never held any of those roles at OCS Operations.
She also believes the negative publicity she has received is "both unmerited and distressing".
On foot of the seizure of material on May 19, she and D2 brought legal proceedings against the WRC seeking, among other things, to restrain the WRC from exercising any further powers in respect of D2 and Foley in investigating the Clerys redundancies.
WRC inspector James Kelly rejects Foley's version of events, and a bitter war of words has broken out between both sides in court.
The High Court has heard that he believes the description outlined above was "utterly misleading and did not in fact occur", saying that he believes Cooney and Brydie did not make their decisions at arm's length from Foley and that the decision to wind up Clerys was made prior to June 12.
He said Foley and D2 "continue to be selective in the provision of information to this Court and although they purport to explain the transaction and make the claim that it is bona fide and above reproach, they have of necessity, concealed information which would seriously call into question the position being adopted."
He said the deal was brought about "by virtue of events [that] were not bona fide but the transaction was arranged and carried out and brought into effect by virtue of secret meetings and events that were not bona fide from a commercial perspective and were highly inappropriate and these events were organised and arranged under the auspices of a plan called 'Project Clock'".
In response, Foley said that there was "no credible basis to support such an allegation".
"The suggestion of secret meetings, and the implication of something improper, is far-fetched," she said in a sworn statement.
"It is normal business practice for parties considering an acquisition to retain legal and other commercial advisors, which in this case included KPMG and A&L Goodbody Solicitors, to advise on, and carry out due diligence as part of the transaction... it is absolutely normal for such commercial parties engaged in a transaction such as this to enter into confidential discussions."
Other parties including Redmond, Cooney and Brydie, and Eamonn Richardson of KPMG who was appointed liquidator of OCS Operations, also rejected allegations of impropriety.
However, it has been accepted in court that these issues are not central to the case at hand, which is about whether the WRC was entitled to act the way it did when it entered D2's offices last May.
The WRC says that it has acted in a proper manner at all times - and that Foley's side were trying to "mischaracterise the investigation".
It says directors' packs bearing a D2 watermark and containing financial details about Clerys had been supplied to Brydie and Cooney by D2 prior to the takeover, and that this was one of the reasons why they sought to enter D2's premises.
They were allowed to do so under a provision of the Workplace Relations Act 2015 that allows an inspector entry to a premises other than dwelling where he or she has reasonable grounds for believing that records or documents relating to the employment of persons are kept, they argue.
Foley's side claims they exceeded their powers, with her barrister Remy Farrell SC comparing it to "traffic wardens dropping on ropes from helicopters," saying that D2's office had nothing to do with the employment of Clerys workers.
The High Court will make its decision in due course.
Sunday Indo Business