Thursday 20 June 2019

Appeal by ex-Dolmen executive on costs security in €6m case refused

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John Mulligan

John Mulligan

A debt-advisory firm founded by former Dolmen Corporate Finance executive Kevin Beary, has lost an appeal against a High Court order that the firm provide security in respect of the costs of defendants in a €6m action the company is taking against them.

Beary Capital Partners sued companies called Htamretfa Ltd, formerly Dolmen Securities, and Htamretfa Corporate Finance (formerly Dolmen Corporate Finance), alleging that an asset purchase agreement signed between the three firms was breached.

Beary Capital has claimed it was due fees from financing projects that would be undertaken with Mainstream, the renewable power firm, and Nama. The Htamretfa firms have also made a counterclaim against Beary Capital, claiming it breached the asset purchase agreement.

Mr Beary left Dolmen around 2010 - two years before Dolmen Stockbrokers was acquired by US financial services group Cantor Fitzgerald.

The financier had been a shareholder in both Htamretfa ('Aftermath', spelled backwards), and in Htamretfa Corporate Finance. He was managing director of Dolmen Corporate Finance and had a service contract with Dolmen Securities.

Beary Capital entered an asset-purchase agreement with the Htamretfa firms, where it bought certain assets from them. Much of that consideration was deferred and dependent on Breary Capital receiving income from certain projects.

Beary Capital claimed that it received no income from these projects and has paid no consideration for the assets.

The firm initiated proceedings in 2014 against the Htamretfa vehicles as well as Cantor Fitzgerald Ireland.

It made the claim in respect of two elements of the asset-purchase agreement. One of the pipeline of projects which was assigned to Beary Capital comprised the fees to be earned from arranging mezzanine finance in respect of a contract with Mainstream. The original mezzanine finance had been put in place in 2008 by the Htamretfa firms, was rolled over in 2011, and rolled over again in 2014.

Beary Capital has claimed that at the time the asset-purchase agreement was signed, it was contemplated that the Mainstream contract would be rolled over.

Beary Capital also alleges that the Htamretfa firms agreed to seek the consent of Nama to sub-contract the services to be provided under an existing contract with the agency. Instead, it's alleged, the Htamretfa firms told Nama that they were no longer engaged in carrying out the types of services covered by the Nama contract. Nama then decided not to award any subsequent contracts to the Htamretfa firms.

Beary Capital has claimed for damages for the alleged breach of the asset purchase agreement, negligence and breach of duty, and misrepresentation and damages for wrongful interference with the economic interests of the firm. The value of the claim has been assessed at €6m.

The Court of Appeal has said that the High Court trial judge was correct to strike out the case against Cantor Fitzgerald, and also refused the appeal by Beary Capital against a High Court decision to order it to provide security for the defendants' costs and staying the proceedings pending the provision of that security.

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