Wednesday 21 August 2019

Blackrock shares the 'real target of court bid'

Larry Goodman, whose firm Breccia had asked the court to lift injunctions on calling in loans
Larry Goodman, whose firm Breccia had asked the court to lift injunctions on calling in loans

Tim Healy

THE "real target" of Larry Goodman's company Breccia in proceedings over loans of Blackrock Clinic shareholder Dr Joseph Sheehan is not to recover a debt owed but to appoint a receiver and acquire Dr Sheehan's shares in the clinic, a High Court judge has said.

Blackrock Hospital Limited (BHL) was incorporated in 1982 and owns the share capital of Blackrock Clinic Ltd, co-founded in 1986 by Dr Sheehan with fellow surgeons James Sheehan and Maurice Nelligan, and Dr George Duffy.

Dr Sheehan and developer John Flynn and the latter's company Benray took separate actions against Breccia over the price sought by it for redemption of loans made by Anglo Irish Bank from 2006 to buy shares in the clinic.

The loans were sold by Nama to Breccia.

In a judgment yesterday on another aspect of the long-running litigation, Mr Justice Robert Haughton said Breccia, in asking the court to lift injunctions preventing Breccia calling in Dr Sheehan's loans before a full hearing of his case, had not come to court "with clean hands" and there was "a lack of candour".

Despite repeated assertions that Breccia simply wishes to recover the debt owed, the court is "confirmed in its view" the real target of the proceedings is the acquisition of Dr Sheehan's shares following on receivership, the judge said.

In its application, Breccia had argued Dr Sheehan, as a result of a Court of Appeal (COA) decision earlier this year in related proceedings concerning Mr Flynn and Benray, has no bona fide case remaining to be tried at a full hearing.

Mr Justice Haughton rejected those arguments and said he was satisfied "there remains fair, serious and bona fide issues to be tried".

Those particularly concerned, but were "not limited to", Dr Sheehan's pleas of conspiracy against Breccia and misuse of confidential information, he said.

If the injunctions are lifted now, Dr Sheehan would probably lose the rights to his shares in BHL and the right to redeem the loans made for him to acquire his shareholding, the judge said.

Damages would not be an adequate remedy for Dr Sheehan in those circumstances and, for reasons including Breccia's lack of candour in this application, the balance of convenience favoured leaving the injunctions in place.

There was no prejudice to Breccia by the injunctions continuing, he added.

Breccia's application concerned injunctions granted by another High Court judge in 2014 which prevented it calling in or enforcing security for the Sheehan loans.

Breccia had consented to the injunctions at the time but earlier this month applied to get them discharged them in light of a March 2017 COA ruling Breccia was entitled to a €8.7 judgment and interest against Mr Flynn and Benray.

The COA held Breccia had validly appointed a receiver in 2014 over Benray's shares in BHL and the receiver was entitled to sell those shares. It also overturned High Court findings that the 2006 BHL shareholders agreement included an implied term the shareholders owe each other "mutual general duties of good faith and fair dealing" and limited a shareholder's right to recover monies under another shareholder's loan.

In opposing Breccia's bid to have the 2014 injunctions discharged, Dr Sheehan argued a substantial part of his claim against Breccia remains undisturbed by the COA decision.

Following Mr Justice Haughton's ruling yesterday, the 2014 injunctions remain in place.

Irish Independent

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