Three shareholders in Web Summit appear to be close to settling their bitter legal disputes after a High Court trial was adjourned to facilitate further discussions, the court heard on Wednesday.
The civil trial, which was slated to run over nine weeks in Dublin, was due to hear evidence in the morning from former director Daire Hickey after Mr Justice Michael Twomey granted an adjournment on Tuesday, urging all parties to find a resolution to avoid a lengthy trial.
Wednesday morning’s session was further delayed as lawyers for the three parties – Mr Hickey, Paddy Cosgrave and David Kelly – were seen in discussions in the corridors of the Four Courts.
Lawyers had arrived in the morning, apparently ready to begin hearing evidence, but left the court shortly before 11am.
At 12.30pm, Michael Cush SC, for Mr Kelly, thanked the judge for his patience and said the time had not been wasted. He asked for an adjournment to 2pm and said it would be “worthwhile”.
Upon returning to court shortly after 2pm, Mr Cush told the court he was pleased to say there had been “a development”. He said: “We are now at a stage where we would benefit from the time between now and tomorrow morning so what we have discussed is written up and finally agreed.”
Mr Hickey would have been the first witness called and the first of the three principals to give evidence in court since proceedings got under way last week.
Five separate legal actions were being heard simultaneously before the High Court in a protracted and acrimonious legal dispute, which had been expected to last into June.
Web Summit founder Mr Cosgrave, who owns 81 per cent of the shares in the trading company behind Web Summit, is suing former business partner David Kelly, who owns 12 per cent, for alleged breaches of his duties as a director.
He is, in turn, being sued by both Mr Kelly and Mr Hickey – who holds 7 per cent of the shares in Web Summit – for alleged shareholder oppression and breaches of a profit-sharing agreement.
At the outset of Tuesday’s proceedings, Mr Justice Michael Twomey appealed to the three parties to renew efforts to settle matters outside of court to end what could otherwise turn into a lengthy dispute on appeal, potentially lasting until 2028.
Mr Hickey and Mr Kelly want Mr Cosgrave to buy out their shareholding in the business, and any settlement is likely to see Mr Cosgrave pay tens of millions of euro for their stakes in the company.
The issue of valuation was due to be thrashed out in court over the coming weeks. Delivering his opening remarks last week, Eoin McCullough SC, for Mr Hickey, said the court would hear evidence that the true value of Web Summit was somewhere between €280 million and €360 million, the midpoint being €319 million.
According to this valuation, Mr Hickey’s 7 per cent stake would be worth between €19.6 million and €25.2 million. Mr Kelly’s 12 per cent stake, meanwhile, would have a value of between €33.6 million and €43.2 million.
Both the valuation of the company and the minority shareholders’ entitlements are hotly contested in the proceedings, however.
