| 14.2°C Dublin

Blackrock Clinic co-founder accused of 'bad faith' in row

Close

Shares row: The Blackrock Clinic was founded in 1986

Shares row: The Blackrock Clinic was founded in 1986

Shares row: The Blackrock Clinic was founded in 1986

One of the founders of the Blackrock Clinic has been accused of engaging in "bad faith" litigation after issuing legal proceedings in the US challenging the sale of his shares in the private hospital.

The accusation was levelled at Dr Joe Sheehan (74) by lawyers for share receiver Damien Murran of RSM Ireland.

Mr Murran's lawyers were responding to a lawsuit in which the retired surgeon claims that the €20.3m sale of his 28pc stake in the health facility to Irish Agricultural Development, a company controlled by beef baron Larry Goodman, was fraudulent.

According to court filings, the receiver was appointed to sell the shares by another Goodman company, Breccia, which asserted a security interest amounting to €13m over Dr Sheehan's holding.

The sale earlier this year means Mr Goodman now has the majority of the shares in the hospital. It appeared to herald the end of a long-running dispute with Dr Sheehan over control of the facility.

However, the saga has rumbled on, with Dr Sheehan now putting a value of almost €74m on the 28pc stake and saying he believed there was a competing bid in excess of €40m.

In March he sought Chapter 11 bankruptcy protection in the US state of Illinois, where he lives, and listed the shares among his assets.

A month later he opened a new legal front in the Blackrock row, issuing proceedings there in seeking the "avoidance and recovery of fraudulent transfers".

He claimed that the share sale violated an automatic stay prohibiting the collection of any pre-petition claim against him.

Dr Sheehan also secured an order from a US court requiring Mr Murran to file "an accounting" in respect of the Blackrock shares, including a report on efforts he made to market the shares and any bids received.

In a legal filing seen by the Irish Independent, lawyers for Mr Murran have brought a motion seeking to have that order vacated.

Chicago law firm Goldstein & McClintock described Dr Sheehan as "a serial litigant" who had previously been found by another US judge to be a "bad faith filer".

"The sole reason the debtor filed Chapter 11 in this forum was to attempt to frustrate the Irish receivership because he knew that he was not going to achieve a ruling in his favour in Ireland as he has no legal basis on which to challenge the receiver's appointment," they argued.

In the filing, the lawyers said Mr Murran did not consent to the jurisdiction of the court.

They said Dr Sheehan had been doing business in Ireland and initiated and engaged in numerous legal proceedings there, while Mr Murran was appointed receiver under Irish law.

The filing said RSM had no connection with the proceedings or the US and claimed that the firm was included in the proceedings as a means of exerting pressure on the receiver.

"The Irish courts are the most efficient forum for resolving any dispute regarding the receiver's appointment and/or conduct," the filing argued.

The issue is set to come to a head later this month when a hearing has been scheduled in Chicago for a report on the receiver's compliance with the accounting order.

A statement issued by Breccia said it categorically refuted the allegations of fraudulent conduct made by Dr Sheehan and would vigorously defend such claims.

Dr Sheehan put a value of almost €74m on the 28pc shareholding in a statement of assets and liabilities.

He co-founded the hospital in 1986 with his brother Dr James Sheehan, surgeon Maurice Neligan and Dr George Duffy. Dr Joe Sheehan now lives in Winfield, a village west of Chicago.

Irish Independent