Company directors, pension fund trustees, a co-op and several retired professionals are among 43 Irish private investors suing a firm of solicitors for some €20 million over alleged negligence.
The case relates to a failed investment in Polish property developments allegedly managed by Howard Holdings, a company of businessman Brendan Murtagh.
The investors claim the law firm BDO of Beaux Lane House, Mercer Street Lower, Dublin 2, formerly practising as BDO Simpson Xavier, presented the Polish investment opportunity to a number of “perceived high net worth” clients of the firm and others with a view to making a business profit within three to four years but failed to carry out adequate due diligence.
The investors allege breach of contract, negligence, breach of fiduciary duty and breach of trust by BDO in relation to the investment known as “Project Poland”.
It is claimed the investors were told Project Poland was to be managed by Howard Holdings when, it is alleged, the project was a side project of two directors of that firm. It is also claimed BDO had very little information about the project when allegedly recommending it to “valued clients” and others from late 2006.
BDO also gave investors the impression everything was under control when the project was running into serious problems, retired company director Denis McFerran, Swords Road, Malahide, Co Dublin, who invested €500,000, said in an affidavit.
Mr McFerran also claimed the investors were told Howard Holdings and its directors would guarantee the investment sums and net worth statements supplied in January 2007 put their estimated net worth at €115 million. However, when the investors sought to enforce a €28 million judgment obtained against those guarantors, two were hopelessly insolvent while Mr Murtagh also had “little to offer”, he said.
Mr Justice Peter Kelly today transferred the proceedings by the investors against BDO to the Commercial Court. The firm has said it will be fully defending the proceedings and does not accept the claims.
