Hotelier Noel O’Callaghan claims in Commercial Court proceedings that two of his sons, who took over the running of his business in 2016, have excluded him and prevented him from exercising his right to retake control.
Mr O’Callaghan (74) stepped back in 2016 from the business he built from scratch over 40 years. The first hotel his group acquired was the Mont Clare in Dublin in 1984.
In addition to five hotels it operates, it also owns the 450-acre Mountarmstrong stud farm outside Cashel in Co Tipperary, along with around 100 rent apartments owned by Só Living.
In his proceedings, Mr O’Callaghan claims he stepped down from the day-to-day management of the group to focus on Mountarmstrong and his bloodstock business, leaving the day-to-day running to his sons.
READ MORE
The transfer was done ahead of his 66th birthday in order that substantial capital gains tax relief would not be lost.
It is claimed that, in agreeing the transfer of his shares in Saira Co Dublin Unlimited Company, in which he is a director along with his sons Paul and Charles who now run the group, he wanted a “fallback position in the event of any future dispute” whereby he could retake control of Saira.
Accordingly, Paul and Charles, along with his third son Bryan who was involved in the business until he departed in 2023, signed a form of proxy appointing their father to act as each of their proxy and vote on their behalf at meetings of the Saira board. The proxy is still extant and binding, it is claimed.
As part of the 2016 agreement, Mr O’Callaghan snr was to be paid an annual salary of €500,000 for the rest of his natural life and to have his credit card expenses discharged along with the benefit and control of Mountarmstrong.
After Bryan left in 2023, a new shareholders’ agreement was made but, it is claimed, this did not replace the 2016 agreement.
The stud farm, which comprises a large number of racehorses, was operated by Saira subsidiary, Sherborough Development Co Unlimited Company, and Noel O’Callaghan is the full or partial beneficial owner of the bloodstock, it is claimed.
It is alleged that, since 2024, Paul and Charles have attempted to exercise control over the bloodstock with instructions for valuations and sales of some animals done without their father’s consent.
In 2024, Noel sold his interest in a commercial property called the Archers Building in Fenian Street, Dublin, to Saira. It is claimed that there was a failure to disclose KBC Bank was negotiating the surrender of its lease on the building, which was eventually done for €16.6 million, and this resulted in an undervaluation of the building at the time the father sold his interest. It constituted a material non-disclosure and secret profit, it is claimed.
Noel O’Callaghan’s relationship with Paul and Charles began to deteriorate in 2024 with the purchase of residential properties in Warrenpoint for their personal use, the withdrawal of instructions to prepare board packs for directors’ meetings and the payment of a dividend of €3.2 million to the two sons.
When Noel challenged these decisions, his sons began to “freeze” him out by removing clerical support and the cancellation of payments to him by Saira, including health insurance.
The proceedings by Noel are against Paul and Charles O’Callaghan, Saira and Sherborough.
On Monday, the case was admitted on consent to the Commercial Court on the application of Martin Hayden SC who said, in reply to a question from Mr Justice Mark Sanfey, that mediation had been tried already.
The judge said in cases involving close family members mediation was desirable. He approved agreed directions for the progress of the case and adjourned it to November.
