The corporate structure put in place by Luxembourg businessman Marc Godart and his family for their property and letting business in Ireland is clearly quite “murky”, a judge in the High Court has said.
Mr Godart (35) used funding from family companies in Luxembourg to invest in Irish property during the economic crash and is now involved in development and the letting of his own and other people’s properties.
He is the director or secretary of more than 50 Irish companies, his mother, Denise Godart, née Webster, (64) is a director of 11, and his father, René Godart (71), is a secretary of 12. Both parents have addresses in Luxembourg while Marc Godart has addresses in Dublin and Luxembourg.
In a case brought in the High Court by a former tenant, Lizet Pena-Herrera, against the Godart company Green Label Short Lets Ltd over the non-payment of a debt, Mr Godart has sworn an affidavit in which he said the company has effectively ceased operations and does not have the assets to pay the more that €15,000 plus costs due to Ms Pena-Herrera.
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He said his family have a corporate structure based on Luxembourg law whereby all the revenue raised in Ireland “has to be transferred” back to a company in Luxembourg that owns all of the Godart companies involved in property ownership, short-term letting and other activities here.
It is a requirement of the structure that the majority of board members and people who “bind” the company reside in Luxembourg and that subsidiary companies abroad “remit revenue to the parent company within 12 months of receiving group financing funds”.
When the case was opened before Mr Justice Brian Cregan in the High Court on Monday, he asked barrister Darragh Haugh, for Green Label Short Lets, if Mr Godart, who is the sole director of the Irish company, was resident in Luxembourg. Mr Haugh said that was his understanding but he added that Mr Godart may “split” his time between Ireland and Luxembourg.
Green Label Short Lets is part of a “Société de Participations Financières (Soparfi) structure” and its parent company is Itzig Sarl in Luxembourg, Mr Godart said in his affidavit. Soparfis are “unregulated and fully taxable ordinary commercial companies whose corporate purpose consists solely of holding and related financial activities”. All the revenue of Green Label Short Lets has to be transferred to Itzig, he said.
Mr Justice Cregan said it was “clearly quite a murky structure” and ordered that Mr Godart swear an affidavit setting out all the other Irish companies he is involved with in the Irish property business, details of the Luxembourg holding company, details of two Irish companies that had been the subject of criminal findings in the District Court in relation to breaches of the planning laws, and other matters.
Ms Pena-Herrera’s legal team want the Godarts to be ordered to answer questions under oath about the financial affairs of Green Label Short Lets but Mr Godart, in an affidavit, has said his mother is no longer a director of the company and his father never was.
“I say, therefore, that the inclusion of my family in these proceedings is deeply personal and inappropriate,” he said. He is also resisting his being called, saying the company has no assets to pay the debt, which arises from a successful complaint about an illegal eviction.
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Mr Justice Cregan said Mr Godart seemed to think he could throw out tenants for complaining about overcrowding and then complain when his mother and father were brought into proceedings where they were directors.
The judge said if money had been remitted by the Irish company to its parent company in Luxembourg in the wake of the compensation award to Ms Pena-Herrera, that could amount to a fraudulent transfer and “certainly Mr Godart has to answer questions about that”.
He said the unappealed findings were that Mr Godart’s company had “punished” Ms Pena-Herrera for complaining about overcrowding in the house where she was a tenant by serving her with an illegal eviction notice, and had then “picked up her bags and baggage and threw her out” when she was not at home, even before the notice period on the illegal eviction notice had expired. This, according to her, had made her effectively homeless.
The case was adjourned to later this month.
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