Saturday 24 February 2018

Property 'Ronaldo' and football club director cry foul in High Court dispute

The dispute sheds new light on difficulties at Bray Wanderers, where Mr Mulvey recently withdrew financial support. Stock photo
The dispute sheds new light on difficulties at Bray Wanderers, where Mr Mulvey recently withdrew financial support. Stock photo
Shane Phelan

Shane Phelan

A multi-million euro row has erupted between a high-profile developer, who has described himself as the Ronaldo of the property market, and a director of a League of Ireland football club.

The dispute, involving New Generation Homes founder Greg Kavanagh and Bray Wanderers director Gerry Mulvey, is set to play out in the High Court where the former business partners are suing each other.

Both sides claim the other breached the terms of an agreement under which construction and property company shares were to be transferred to Mr Kavanagh in return for him making a series of payments totalling €4.8m to Mr Mulvey.

In a statement of claim Mr Kavanagh is seeking an order directing Mr Mulvey and his wife Sharon pay him €2.85m plus damages. But the Mulveys have issued a counterclaim, seeking €2.95m from Mr Kavanagh and damages for breach of contract.

The dispute sheds new light on difficulties at Bray Wanderers, where Mr Mulvey recently withdrew financial support.

It is understood he is citing the dispute with Mr Kavanagh as the reason he was unable to continue pumping money into the club. Bray Wanderers has since secured alternative funding to pay players for the rest of the season and into 2018.

Developer Greg Kavanagh. Photo: Gerry Mooney
Developer Greg Kavanagh. Photo: Gerry Mooney

There had been speculation in the past linking Arklow-based Kavanagh with a potential investment in the club. But as part of the proceedings he is seeking a letter from Mr Mulvey releasing him from any future liability or obligation to the club.

Mr Kavanagh declined to comment on the case when contacted by the Irish Independent, but said he has never had any input in the running of the football club. Mr Mulvey also declined to comment on the proceedings, which came before Mr Justice Brian McGovern in the commercial division of the High Court last week.

The pair have been in the wars before, with Mr Kavanagh consenting to a €1.2m judgment in 2009 arising out of debts he owed to Mr Mulvey, who invested in his development business.

The latest dispute centres around two of Mr Kavanagh's businesses in which Mr Mulvey became a substantial shareholder. Fairtrade Building and Construction Ltd and Ballycrag Developments Ltd were set up in October 2012 for the purpose of developing property.

Mr Mulvey bought half the shares in both companies, but a dispute arose in 2016.

In legal filings, Mr Kavanagh said this disagreement related to "corporate governance" issues, while Mr Mulvey described the problems as "commercial difficulties" including Mr Kavanagh's failure to satisfy the 2009 judgment. Both sides entered negotiations to resolve the dispute in April last year and an agreement was reached.

This involved Mr Kavanagh agreeing to make a series of payments to the Mulveys totalling up to €4.8m on a phased basis between May 2016 and May of this year. In return, Mr Mulvey's shares in Ballycrag and Fairtrade were to be transferred to Mr Kavanagh.

Mr Kavanagh also claimed the agreement included an assurance Mr Mulvey would procure the "letter for release" from Bray Wanderers.

He said he made payments under the agreement but the shares were not transferred.

He also alleges the Mulveys breached the agreement by failing to produce a Revenue capital gains tax statement in relation to the shares.

However, in their counterclaim the Mulveys deny any material breach of the agreement and claim any breaches were on Mr Kavanagh's side. According to their affidavit, an instalment due under the agreement was not made on time and a shortfall of €650,000 remains.

The Mulveys also state there was a clause in the agreement that Mr Kavanagh would agree to pay an additional €1m should he not make all of the payments due under the agreement on time. They say their ability to transfer the shares was contingent on Mr Kavanagh identifying an appropriate transferee, which they claim he failed to do until last September.

They also complained Mr Kavanagh only raised the issue of a capital gains tax certificate after the agreement was reached and they had to take advice on the issue. The case returns to court later this month when a discovery motion is listed.

Irish Independent

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