Wednesday 17 October 2018

Kilkenny Group family war set to rumble on into the High Court

The Irish retail sector has warned that the ongoing row in the Kilkenny Group has the potential to become one of Ireland’s most destructive family feuds
The Irish retail sector has warned that the ongoing row in the Kilkenny Group has the potential to become one of Ireland’s most destructive family feuds
Ralph Riegel

Ralph Riegel

A businessman who is suing his mother over his dismissal from the Irish luxury goods firm, Kilkenny Group, admitted that there is no sign "the legal war is over".

The high-profile family feud between Greg O'Gorman and his mother, Marian O'Gorman, who runs the Kilkenny Group, now appears set to go to full High Court hearing.

The row erupted in 2016 when Marian O'Gorman, the chief executive of the Cork-based family business, terminated the employment of her son, Gregory. Greg O'Gorman was the marketing director for the Kilkenny Group for 13 years and had played a key role in the successful expansion of the retail operation.

He immediately took legal action to stop his dismissal and to require his mother to honour a deal which he claimed has held the Kilkenny Group in trust for him and his siblings.

Mr O'Gorman said the failure of the mediation process so far to deliver a satisfactory settlement was very disappointing. "As a result of a failed mediation and failed settlement agreement, my legal team have now lodged our discovery with the Commercial Court and served the defendant and all notice parties, which include Michelle, Melissa, Christopher (siblings) and Michael O'Gorman (father), with same," he said.

"The defendant, Marian O'Gorman, and my father, Michael O'Gorman, notified several parties in December and over Christmas that a settlement had been agreed and that the legal war was over.

"I was extremely surprised to have several parties contact me to say they heard it's over when clearly I was fully aware that no agreement had been reached," he said.

"We have been reliably informed that Kilkenny in late 2017 purchased the property in Galway where they are currently trading out of (High Street). This would typically be a very unusual move when the ownership of the company is being disputed. However, there are possibly other reasons why this was done which will become more evident during this process," Mr O'Gorman said.

The discovery process, which involves all relevant company and legal documentation being inspected by both sides, has now commenced. Without a settlement, the legal battle between the mother and son will reach full hearing in mid-2018.

Mr Justice Brian McGovern in the High Court was informed that mediation talks ongoing since late last year have so far failed to achieve a settlement.

Rossa Fanning SC, for Mr O'Gorman, said there had been negotiations between the sides for some time concerning a resolution but unfortunately there was "no compromise at this time". The matter was adjourned until a High Court sitting in April with discovery affidavits now to be sought.

Mr O'Gorman said in a statement that it was "very unfortunate" the meditation process had so far failed.

He said he was confident that the discovery process would support his claim to 25pc ownership of the Kilkenny Group. "My reputation has been so damaged by being fired for no fault of my own and by the subsequent rumours that I have been unable to secure alternative employment since," Mr O'Gorman added.

Clydaville Investments Ltd, which carries on the business of luxury design under the 'Kilkenny' brand and employs 300 people, increased its turnover under Mr O'Gorman's watch from €18m in 2010 to approximately €30m in 2016 and profits rose from €300,000 to €1,500,000 over the same period.

Turnover was €27m in 2015 and the High Court was told there was a preliminary desktop valuation of some €50m for the business, including its "significant" property assets.

Mr O'Gorman has consistently maintained that his dismissal, signalled in a letter delivered to his Cork home on July 8, 2016, was with "no suggestion of misconduct or non-performance." He also claimed that the manner of his dismissal was "demeaning and humiliating". He said the dismissal had left him, his wife and three children "financially destitute" and unable to secure alternative employment. At the current time, Mr O'Gorman is dependent on social welfare. "Myself and my family have been put through 20 months of hurt and pain and I have been stripped of my career and reputation as a result of my mother's actions," he said.

"I went into mediation in good faith after months of delaying tactics from the other side, but unfortunately, mediation has broken down."

"I have now been left with no choice but to proceed with my case in the High Court for the 25pc shareholding I have been promised through our 'Family Constitution'. This is a fight for what is right and fair. During these proceedings, I believe the real truth behind this case will be brought to light."

Mr O'Gorman has claimed that under the so-called 'Family Constitution', the Kilkenny Group is divided in equal shares between him and his three siblings, Michelle, Melissa and Christopher. The 'Family Constitution' was established, somewhat ironically, in a bid to avoid the family feud which involved Mrs O'Gorman and her own siblings over the ownership of the hugely successful Blarney Woollen Mills Group founded in Cork by her late father, Christy Kelleher. Mr Kelleher's death in 1991 sparked a power struggle among his children - Marian and her sister Freda had a major falling-out that year, the latter going on to form another business, the hugely successful Meadows & Byrne lifestyle chain.

This dispute was followed in 1999 by a High Court battle when Marian, her husband Michael and her sister Bernadette Kelleher Nolan went to court to stop their brothers Pat, Frank and Kevin from removing Michael from the group's board. At the time it was thought that the move was part of a plan to remove Marian as chief executive.

The stand-alone Kilkenny Group, which had originally been owned by the government, and bought by Blarney, was carved out from the group as part of the settlement, with the brothers retaining the Blarney Woollen Mills shop on Nassau Street in Dublin, and a share in the Blarney Park Hotel as well as other assets. Relations between the factions of the family remained strained - Mr O'Gorman claims "significant business assets" were sold following the settlement of a second dispute between siblings.

Mrs O'Gorman has not publicly commented on the two-year dispute with her son.

However, Mrs O'Gorman told a newspaper in 2015 that she still doesn't speak to some family members who opposed her in previous legal actions.

In High Court papers revealed last year, Mr O'Gorman described his mother as "by nature a domineering, aggressive and belligerent person."

In January 2017, Mr Justice McGovern pleaded with both the mother and son to resolve their differences through agreed mediation. Such mediation was, he said, "very wise" and he expressed hope it would help resolve the matter.

The plea came as many with the Irish retail sector warned that the dispute has the potential to become one of Ireland's most destructive family feuds.

Irish Independent

Editor's Choice

Also in Irish News