'Project Chrysalis' is indeed transformative – but not for Bloxham
The Irish Stock Exchange dubbed its shift to a plc as 'Project Chrysalis', but there was to be no transformation of Bloxham Stockbrokers' fortunes by the move.
Earlier this year, Bloxham liquidator Kieran Wallace lost a High Court case where he argued that the termination of the stockbroking firm's membership of the exchange had not been made for proper purposes and that it would, as a result, lose out on the impending demutualisation windfall.
But Mr Justice Peter Charleton ruled there was "no reliable evidence" that the December 2012 decision to terminate Bloxham's membership of the Irish Stock Exchange arose from a conspiracy or was engineered so as to financially benefit other member firms of the ISE as opposed to being made for the benefit of the ISE as a whole.
The judge said Bloxham had been afflicted by "deeply unfortunate circumstances". But he stressed that the termination of its membership had been effected because there was "literally no prospect" of the firm returning to active membership.
Bloxham, which operated as an unlimited partnership, went into meltdown in spring 2012 when the firm's head of finance and compliance, Tadhg Gunnell, revealed there were certain financial irregularities that were hidden over the years.
The firm had 17,000 private clients at the time.
Mr Wallace took the High Court action for the benefit of Bloxham's creditors, including National Irish Bank, which was owed €8.5m, and the Revenue Commissioners, which was owed €2.3m.
Securing the windfall from the exchange would have meant a higher payout to Bloxham's creditors.