Sunday 25 February 2018

Kilkenny Group fears €300k Revenue bill for holiday villa perk

Greg O'Gorman signs on the dole as bitter company dispute escalates

Greg and Marian O’Gorman. Photo: Kieran Harnett
Greg and Marian O’Gorman. Photo: Kieran Harnett
Donal Lynch

Donal Lynch

The Kilkenny Group, one of Ireland's leading retail dynasties, may face a €300,000 bill from the Revenue over the status of a Spanish villa owned by the group but used by family members as a holiday home for years.

Last January, in a serious escalation of a High Court row between Kilkenny Group founder Marian O'Gorman and her son Greg O'Gorman, the group's former marketing director, family members were informed that the board of Clydaville Investments, trading as The Kilkenny Group, had decided to sell the villa.

Marian O'Gorman is the named shareholder of Clydaville Investments Limited.

In February, Michael O'Gorman - Marian O'Gorman's husband - was informed in a letter that the Kilkenny Group intended to let him go for alleged "gross misconduct".

The letter accused Michael O'Gorman of breaking into the Spanish villa and remaining there as a "trespasser."

Now it is alleged that the dispute surrounding the villa brought it to the attention of the Revenue.

The Kilkenny Group, through a spokesman, have denied that Revenue have made a claim in relation to the villa and has made no comment regarding discussions and meetings with Revenue.

However the Sunday Independent has seen a document, sent to Michael O'Gorman by Marian O'Gorman, indicating that the Revenue has signalled that the Group may face a bill of €100,000 a year for the last five years representing full benefit-in-kind payments for use of the villa.

According to the document, Revenue considers that the villa has not been rented out but has been used by a family member.

The BIK back payments, if due, including interest and penalties, could cost the group some €310,000 a sum which is understood to create greater financial risk for the company. The issues with the villa are part of a wider O'Gorman family conflict, which centres on a 2010 agreement governing the future ownership and management of the group.

Greg O'Gorman is now claiming social welfare payments since his departure from the group whose sales and margins are understood to have fallen for the first quarter of 2017.

The Kilkenny group employs 300 people across 15 stores and owns a highly valuable online portal, www.kilkennyshop.com, as well as "significant" properties.

Greg O’Gorman claims that despite promises over years of a share transfer for his hard work, his mother Marian last June publicly repudiated a signed ‘Family Constitution’ document under which she held legal ownership of shares in the company in trust for the O’Gorman Family Business Partnership. It comprised himself and his three siblings, Christopher, Melissa and Michelle.

The three have all been joined as notice parties in the case, which is due to be heard next month in the High Court.

However, Greg O’Gorman said he makes no criticism, express or implied, against any of them and won’t advance any legal case against them in the action. In court documents, Greg O’Gorman has previously said his dismissal left him “financially destitute”.

He is now understood to be in receipt of social welfare payments.

His unfair dismissal case was due to be heard next month. Solicitors representing him have objected to a request for a postponement by the Kilkenny group to accommodate a holiday for its finance director, Conor Lynch.

Marian O’Gorman’s husband Michael’s unfair dismissal case against the company is now the subject of ongoing mediation.

Greg O’Gorman, who says he received a €50m valuation for Clydaville Investments, trading as Kilkenny Group, has asked the High Court “if necessary” to appoint a receiver and sell the company’s assets to secure what he claims is his 25pc equity share — which he says is valued at €12.5m — in the business.

A High Court judge pleaded for Marian O’Gorman and her son to consider mediation to avoid a public exploration of the family business dispute.

Mediation has not taken place.

Sunday Indo Business

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