INM chairman James Osborne didn’t want lengthy litigation over Gavin O’Reilly payment
THE chairman of Independent News and Media (INM) James Osborne did not want to face into lengthy and damaging litigation to terminate the employment of the company's former CEO Gavin O'Reilly, the Commercial Court heard today.
Mr Osborne told the court it would not have been "a desirable course of action" had the company simply dismissed Mr O'Reilly and then waited for him to take legal proceedings which he had threatened to
do. Mr Osborne said it was clear to him that Mr O'Reilly was lining
up some "heavy-weight" lawyers to bring a case if the comapny did not meet his (O'Reilly's) minimum demand of 23 months pay in compensation for resigning.
This was the reason it was decided to negotiate a termination package, he said.
Mr Osborne was giving evidence on the second day of a challenge by non-executive INM director Paul Connolly to an April 19 decision of the board to approve a €1.87m payment, or 23 months pay, to Mr O'Reilly on his departure after three years as CEO.
Mr Connolly is seeking declarations from the court that the payment was unlawful because it first required shareholder approval under Section 186 of the Companies Act.
Mr Connolly also claims the payment was done with undue haste and was excessive.
In response to Michael Howard SC, for INM, James Osborne told the court today that following his appointment as chairman last October, he undertook a review of a number of matters including the CEO's performance.
It was following correspondence and a number of contacts with Bank of Ireland, lead financier of INM, that Mr Osborne came to the conclusion that Mr O'Reilly's position was no longer tenable, he said.
Under cross-examination, Mr Osborne said he inquired with INM's major shareholder Denis O'Brien about a rights issue and was told by Mr O'Brien that he would not support such a rights issues while the existing management was in place.
The hearing continues.