A High Court judge has criticised as “unacceptable” a request by minority shareholders in Web Summit for a two-day extension to file additional expert information as part of their cases alleging oppression.
Mr Justice Denis McDonald, who leads the commercial division of the High Court, said he would extend the deadline by one working day but “no longer”.
He had earlier this week directed Web Summit co-founders David Kelly and Daire Hickey to file by Friday an addendum to a Grant Thornton financial expert report.
Mr Kelly, a 12 per cent shareholder in the tech events firm, and Mr Hickey, who has a 7 per cent stake, are suing Web Summit holding company, Manders Terrace, and Paddy Cosgrave, a founder, 81 per cent shareholder and company chief executive. Their lawsuits allege they are oppressed as minority shareholders.
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They are also suing Mr Cosgrave in separate cases alleging a breach of a profit-share agreement, while Mr Cosgrave has a separate case against Mr Kelly for alleged breach of fiduciary duties.
The actions are due to be heard over nine weeks beginning next March.
Seeking the filing extension on Friday, barrister Frank Kennedy, for Mr Kelly’s shareholding entity Graiguearidda, said the Grant Thornton experts have other immovable professional commitments this week that prevent them from completing the task by this evening. He said Manders Terrace was refusing to agree to an extension beyond Monday.
Kelley Smith, senior counsel for Mr Hickey’s Lazvisax, said Manders Terrace adopted a “disappointing” stance, given it has previously been granted “numerous” extensions for filling discovery and other matters.
Manders Terrace’s senior barrister, Bernard Dunleavy, said the time extension would have a knock-on effect for a tight timetable of work leading up to the hearing of the cases.
Noting Manders Terrace will not be significantly prejudiced, Mr Justice McDonald said he would extend the filing time until Monday at 6pm but “no longer”.
It is “unacceptable” that the addendum was not delivered today, said the judge, adding that an expert who cannot abide by the court’s requirements should not be providing evidence to the court.
“Experts just have to co-operate with this court and comply with directions,” he said.
The judge said his direction requiring an addendum by today (Friday) came after the Grant Thornton expert hired by Mr Kelly and Mr Hickey expressed a view on how the case should handle the prospect of applying a discount to the value of the minority shareholdings in the event of a share purchase.
He said the expert said the question of a discount was a matter for legal submissions, but if a discount is to be applied he would deal with it by way of oral evidence or an addendum to the report.
The judge said he finds it “very surprising” that the minority shareholders’ solicitors and counsel did not intervene when they saw this stance.
The approach was “utterly unacceptable” as there is “always a debate” about whether a minority discount should apply in cases such as these, said the judge. The other side must be able to deal with the expert’s view on this in advance of a trial, he said.
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