A company controlled by businessman Larry Goodman has been refused a stay on orders clearing the way for shareholders in Dublin’s Blackrock Clinic to redeem their loans for investing in the facility.
Lawyers for Dr Joseph Sheehan, who has a 28 per cent shareholding in the clinic, told the Court of Appeal he was prepared to pay higher interest to another lender to secure funds for loan redemption so as to be “unchained” from Mr Goodman’s company, Breccia.
The dispute concerns loans made by the former Anglo Irish Bank to Dr Sheehan and his fellow shareholder, Dr John Flynn and Mr Flynn’s company, Benray, for investing in the Dublin clinic.
The loans were later acquired by the National Assets Management Agency which sold them to Breccia.
Earlier this year, the High Court ruled the shareholders were entitled to redeem their loans for figures substantially less than sought by Breccia.
Mr Justice Robert Haughton, having rejected arguments by Breccia concerning surcharges and enforcement costs, ruled Mr Sheehan could redeem his loans for €16.9 million, not the some €20 million sought by Breccia.
In their separate case, Mr Flynn/Benray won an order allowing them redeem for €9.3 million, not some €11 million sought by Breccia.
The judge refused a stay on his orders after the shareholders undertook to provide Breccia with a second charge on their shares.
Breccia’s appeal against the redemption sum orders has been fixed for hearing in November 2017.
Pending appeal, Breccia sought a stay from the Court of Appeal which would effectively prevent the shareholders proceeding with loan redemption until the appeal is decided.
Alternatively, it asked the court to direct Mr Sheehan and Mr Flynn/Benray to pay into court sums totalling several million Euro to represent the estimated difference between Breccia’s redemption claims and the redemption sums fixed by the High Court.
Having heard arguments from the sides, Ms Justice Mary Finlay Geoghegan gave her reserved decision on Tuesday. She concluded that refusing a stay would best minimise any risk of injustice in this matter.
Her conclusion took into account the fact the appeal would not be heard until November 2017 and the High Court had decided the shareholders were entitled to redeem their loans at the sums fixed.
It was also “a matter of common sense and commercial reality” a stay pending an appeal that might not be determined for up to 21 months might create uncertainty about availability of funding for loan redemption.
If they lost the required funding, that would be a very serious injustice when the High Court had ruled they were entitled to redeem their loans.
It was not disputed by Breccia they were entitled to redeem their loans, the dispute was over the appropriate redemption figure, she said. The figures being sought by Breccia were “a lot higher” than demands for repayment of the same loans in 2014, she noted.
The balance of justice was also against requiring the shareholders pay the funds sought into court, she ruled.
She accepted arguments by John O'Donnell SC on behalf of Dr Sheehan that it would be highly unusual to require a winning party in the High Court to pay sums into court, pending an appeal when the High Court found they were not liable for those.
The judge stressed her decision was not concerned with the shareholders’ claims about the motivation and conduct of Breccia.
Both sides, she said, had accepted Breccia had advanced arguable grounds of appeal and she was not concerned at this stage with claims Breccia brought its appeal for tactical reasons in a further effort to prevent share redemption.
Despite the “regrettable multiple disputes” between the sides, it was clear the shareholders were entitled to redeem their loans and remove their borrower/lender relationship with Breccia, and they should not be prevented doing so pending appeal, she held.
