Danske bid to recover €34m from Bloxham ex partners
DANSKE Bank is launching a legal action today against the former head of finance at collapsed stockbroker Bloxham as part of an attempt to have €34m in loans repaid.
The action against Bloxham's former head of finance and compliance Tadhg Gunnell is set to come before the Master's Court, and will be followed at the end of the month by legal actions against other former partners of the failed stockbroking firm.
Bloxham collapsed at the end of May 2012 after the Central Bank found "financial irregularities" in its accounts. For the previous five years, the company had a €5.3m shortfall on its balance sheet. During this time, the accounts were audited by Deloitte.
There were seven partners in Bloxham, which operated as an unlimited partnership. Insurance company FBD had a limited partnership share.
Danish-owned Danske funded the buyout of some former partners for €34m when the seven took control. It is understood some €14m of this was borrowed by partners through unlimited companies.
The bank, which is represented by Dublin law firm Ivor Fitzpatrick and Company, is alleging that the financial accounts on which the buyout was based were "faulty".
The case of Mr Gunnell, who is being represented by McDowell Purcell solicitors, is listed separately from those of the other six as Danske is alleging he prepared false accounts.
Mr Gunnell's case is listed for a summary judgment before the master of the High Court.
A master's motion is a request for a judgment in the moving party's favour before a lawsuit goes to trial and based on recorded testimony.
The other partners being sued by Danske are head of asset management Niall Tinney; head of private clients Paddy Finnegan; head of institutional bonds Peter Costigan; head of institutional equities Patrick Dempsey; and partner in institutional equities Raymond Deasy.
Danske is also being represented by Ivor Fitzpatrick in these six cases, which are due before the courts on Thursday, October 31. The bank is alleging in the cases against the six partners that it advanced funds based on "faulty" accounts.
Bloxham Stockbrokers, which had 17,000 private clients when it was shut by regulators in May last year, is the subject of an "ongoing investigation" by the Central Bank.