Saturday 18 November 2017

Tribunal rejection blow for Stokes brothers

CRUMBLING EMPIRE: Simon and Christian Stokes outside the Employment Appeals Tribunal
CRUMBLING EMPIRE: Simon and Christian Stokes outside the Employment Appeals Tribunal
Philip Ryan

Philip Ryan

CELTIC Tiger poster boys Christian and Simon Stokes's last-ditch attempt to keep a grip on the private members' club that shot them to fame has suffered another blow after an employment tribunal rejected their unfair dismissal case.

The ruling will comes as another humiliating knock for the brothers, who were once the darlings of the boom-era Dublin social scene, but have since watched as their restaurant and nightclub empire collapsed around them.

The dispute centred on the takeover of their private members' club, The Residence, which the 37-year-old twins set up in 2008 and ran alongside a number of other upmarket bars and restaurants that they owned in Dublin city centre.

However, escalating financial problems within the twins' companies, which led to Justice Peter Kelly calling them 'delinquent directors', meant the business was put into receivership in early 2010.

The club was bought by Olivia Gaynor-Long, wife of technology investment magnate Brian Long -- both were Residence members and had previously been approached by the Stokes twins about investing in the club.

Following the acquisition, the twins were asked to sign resignation letters and to take up consultancy contracts that would see them deal with front-of-house client issues but have no responsibility for the running of the club.

The relationship between the Celtic Tiger cubs and the businesswoman soon deteriorated, with the brothers reportedly refusing to accept that the businesswoman was the nightclub owner rather than merely an investor.

Less than three months into the consultancy arrangement, the owners felt they could no longer continue their relationship with the twins due to their attitude towards Mrs Gaynor-Long and because of various court cases hanging over the brothers.

The twins claim they did not realise the implication of signing the consultancy contract and felt they were coerced into the arrangement despite receiving legal advice on the deal.

However, in a decision seen by the Sunday Independent, the Employment Appeals Tribunal ruled by a majority in favour of the nightclub's new owners, saying the brothers should have realised the implications of signing the resignation letters.

It reads: "The claimants resigned from their employment as directors of this company with the benefit of legal advice and therefore should have been fully aware of the legal consequences of signing the resignation letter."

The identical brothers ran a string of restaurants and bars, which were known as lavish hang-outs for millionaire developers and speculators during the heady days of the property boom.

The Wesley College-schooled twins wanted to follow in their father Jeff's footsteps -- he runs the Unicorn restaurant on Merrion Row -- and in their mid-20s began to build their restaurant empire.

The brothers' upmarket eateries such as Bang restaurant and the Clarendon became regular haunts for socialites, models and buccaneering property tycoons like Johnny Ronan.

It was the Nama-indebted developer Mr Ronan who leased the brothers a Georgian townhouse on St Stephen's Green, where they would set up their members-only club, The Residence.

With their restaurant businesses thriving, the twins decided to invest €3m into a refurbishment of the club to ensure their elite guests would be surrounded by opulence.

The €1,600-a-year membership fee ensured the nightclub would be a sanctuary for celebrities and millionaire business people who wanted to have a quiet drink, or a not-so-quiet drink, surrounded by fellow members.

The brothers basked in the celebrity of running the city's most exclusive nightclub and were always on hand to meet and greet their super-rich clientele.

As the economic downturn gripped the country, the Stokes twins watched as the names that once appeared on their VIP guest list now appeared on commercial court listings over unpaid debts.

Zurich Bank soon came looking for the €2.3m they lent the brothers to set up their club that was paying Mr Ronan €300,000 in annual rent.

And it was not long before the duo found themselves incurring Justice Peter Kelly's wrath for failing to pass on employees' tax and PRSI payments to the Revenue Commissioners.

The judge damningly called the former high-rolling friends of the stars 'delinquent directors', saying they engaged in "a form of thieving" by using tax money to trade.

Then came the revelation that the Stokes twins continued to use their company expense accounts to go on lavish holidays and buy Gucci suits, even though their businesses were crumbling.

In January, the twins were barred from acting as directors of companies for four years and it was last reported that the brothers were working in their father's restaurant on €2,500 monthly pay.

On Friday, Simon Stokes said he did not want to comment on the Employment Appeals Tribunal's findings or whether he and his brother would appeal the decision.

He said: "I'm in work at the moment, I don't want to talk, thank you."

Sunday Independent

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