Wednesday 13 December 2017

Publican Gleeson sued for €4.6m by US investor after Mercantile merger

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Tim Healy

A US investment firm is seeking judgment for €4.6m against publican Frank Gleeson, founder of the Mercantile Group which owns hotels, restaurants and bars in Dublin.

EMI-MR Investments LLC, of Delaware, USA, is seeking the judgment arising out of two loans advanced to Mr Gleeson in 2016. The loans were to fund the refinance/purchase of the Bottom of the Hill pub in Finglas, Dublin, and Gleesons pub of Mulhuddart, Dublin, as well as to enable him purchase shares and to pay legacy trade creditors.

The Mercantile Group, which included the Mercantile on Dame Street, the Green Hen in Exchequer Street and Whelans of Wexford Street, merged with the Capital Bars group in 2015.

Capital included Cafe en Seine in Dawson Street and the George in George's Street.

Under the merger, Mr Gleeson had a 30pc shareholding in a company called Ardan Advisory, of which the Mercantile Entertainment Group is a wholly-owned subsidiary.

The other 70pc was owned by JT Magen (Capital Bars) LLC and Danu Advisory Partners Ltd. EMI-MR says in January last year, it loaned €1.75m to Mr Gleeson to enable him buy shares and pay legacy trade creditors. In February, it loaned him €2.55m for the Finglas and Mulhddart pubs with Mr Gleeson putting up a property in Marbella, Spain, as security. A minimum of €1.8m was to be repaid within five months.

It was not repaid and Mr Gleeson also defaulted in relation to the first loan, EMI-MR says.

As a result, it is seeking judgment for €4.6m against him. The case was admitted on consent to the Commercial Court on Monday by Mr Justice Brian McGovern.

Rossa Fanning SC, for Mr Gleeson, said while there was agreement in relation to the admission the commercial list, he would have a lot to say about the merits of the case and about abuse of process. He said his client was bringing separate proceedings over oppression of a minority shareholder.

Aidan Redmond SC, for EMI-MR, said a serious allegation was being made of alleged abuse of process against what is a non-shareholder in Mercantile and all the matters, contained in a letter sent by the Gleeson side last week, should be put on affidavit.

Mr Justice McGovern said he would allow two weeks for affidavits to be exchanged and he would give directions then as to how the case is to proceed.

Irish Independent

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