Investors in J & E Davy said Bank of Ireland (BoI) has failed to make significant payments due to them under last year’s sale of the stockbrokers, the Commercial Court has heard.
BoI bought Davy last year for €427 million.
A company representing Amber Note Unlimited Co, the parent firm which constituted the Davy group of companies, says BoI has failed to make a post-completion payment first due last January.
Ailmount Investments Ltd, which held the legal interest in Amber Note on behalf of 722 investors, is suing Bank of Ireland Nominee 1 Ltd and that firm’s guarantor of the payment, the governor and company of Bank of Ireland.
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The case was entered to the fast-track Commercial Court by Mr Justice Denis McDonald on consent between the parties and adjourned to next December. The judge was told there had been extensive efforts to resolve the dispute but they were not successful.
In an affidavit seeking entry of the case to the commercial list, Brian McKiernan, chairperson of Ailmount, said under the share purchase agreement whereby Davy was sold to BoI, the purchase price was divided into a series of payments, together with a consideration – a payment made on June 1st, 2022, as part of the sale.
The first post-completion payment was due last January and it was to be equal to the 2022 capital requirement reduction.
It was not paid, however, and following requests for payment, solicitors of BoI eventually responded in March that the amount of the 2022 capital requirement reduction was “nil”.
BoI said it intended to maintain the spirit of the share purchase agreement and would need to reformulate a reasonable basis for any reduction in the consolidated capital resources requirement.
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Mr McKiernan said further correspondence followed with BoI’s lawyers saying the 2022 capital requirement reduction was uncertain and resolution of the issue “would clearly operate outside the provisions of the share purchase agreement”.
Ailmount offered the defendants several opportunities to honour their obligations but it was clear the defendants have no intention of making the payment due last January, Mr McKiernan said.
Ailmount said it has made clear this is an impermissible attempt to renegotiate the terms of the share purchase agreement.
The defendants deny the claims.
