A Web Summit co-founder is seeking to alter his shareholder oppression case to include claims that former chief executive Paddy Cosgrave’s recent social media posts about Israel have caused “real and substantial damage” to the business.
The Commercial Court was told on Friday that Daire Hickey, through his entity Lazvisax Limited, which holds his 7 per cent share in the technology events company, wants to argue that posts Mr Cosgrave made in the aftermath of the Hamas attack on Israel occurred in disregard of minority shareholder interests.
Brian Conroy SC, for Lazvisax, told the Commercial Court on Friday that his client has drafted amendments it hopes the court will sanction for inclusion in its action alleging Mr Cosgrave and his commercial vehicle Proto Roto Limited engaged in oppressing Mr Hickey’s rights as a minority shareholder.
The proposed changes relate to a series of events, including a large number of clients and speakers dissociating themselves from the tech conference, which have allegedly harmed Mr Hickey’s interests as a minority shareholder.
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Mr Cosgrave stepped down as chief executive of Web Summit last month after admitting his personal comments had “become a distraction from the event”. A string of tech companies, including Amazon, Google and Facebook owner Meta, pulled out of the conference, which went ahead last week.
The controversy erupted after Mr Cosgrave made various postings on X, formerly known as Twitter, including one saying he was “shocked at the rhetoric and actions of so many western leaders & governments, with the exception in particular of Ireland’s Government, who for once are doing the right thing. War crimes are war crimes even when committed by allies, and should be called out for what they are”.
He subsequently apologised and said he was withdrawing from the platform for a few days.
There has been no indication that Mr Cosgrave’s 81 per cent ownership of the Web Summit holding company, Manders Terrace Limited, has changed.
Responding to Mr Conroy on Friday, Bernard Dunleavy SC, for Mr Cosgrave, Proto Roto and Manders Terrace, said he was opposed to the motion to amend being heard on the same date as eight other pretrial motions in suits and countersuits involving the Web Summit co-founders.
Mr Justice Denis McDonald agreed that the judge due to hear the various motions over three days would likely not have time to consider this additional motion at that stage. However, he said the motion can likely be accommodated before the end of the year.
He gave permission for Mr Hickey to issue his motion for return in early December, when the judge will look to fix a date for its hearing.
Mr Hickey’s case is among several suits and countersuits between Mr Cosgrave and the two other Web Summit co-founders: Mr Hickey and David Kelly, a 12 per cent shareholder. The claims in all of the cases are denied and vigorously contested all round.
Web Summit issued proceedings against Mr Kelly in September 2021 alleging breaches of fiduciary duties, misrepresentation and co-opting commercial opportunities.
Mr Kelly, Mr Hickey and their shareholding entities later filed separate actions against Mr Cosgrave and the company alleging oppression of shareholders’ rights and breach of an alleged profit share agreement.
Mr Hickey, through Lazvisax, is seeking to add to his oppression claim various social media posts made by Mr Cosgrave, some of which have since been deleted.
They include a deleted post on October 7th, the day Hamas killed more than 1,000 Israeli citizens and kidnapped some 240, which allegedly shared a screenshot containing statistics of deaths in the Isreal-Palestine conflict from 2008 to 2023 illustrating a large Palestinian death toll.
In documents provided to the court, Mr Hickey says a series of Mr Cosgrave’s posts from October 7th to October 16th offended and alienated a significant number of influential people in the technology sector. Mr Cosgrave initially refused to apologise, tweeting he “will not relent”, but then “belatedly apologised after the potentially catastrophic effect of the posts on the business of the company had become apparent”, he claims.
Yet, alleges Mr Hickey, on the same day of his apology, Mr Cosgrave “boasted in a now-deleted post” that “in the last 24 hours, while nine investors cancelled, 35 new investors registered. Two media cancelled but more than 50 media requested media passes. Oh and somehow we sold more tickets than any other Monday in 2023″.
Mr Hickey says Mr Cosgrave’s conduct led to significant negative media publicity worldwide about the company and to negative commentary from leading executives.
The Ditch media website, which received funding from Web Summit during Mr Cosgrave’s tenure as chief executive, posted a Palestinian flag on social media in the immediate wake of the Hamas attack, Mr Hickey says.
Further statements by the site, including calling Israel a “racist, supremacist, apartheid state with a fascist government engaged in crimes against humanity”, were “directly prejudicial” to Web Summit’s business and reputation in circumstances where Mr Cosgrave had publicly linked the two firms, he alleges.
Web Summit announced earlier this month that it was ceasing its funding of the Ditch.
This conduct of Mr Cosgrave constituted oppression and/or occurred in disregard of the interests minority shareholders and has caused “real and substantial damage” to the Web Summit business, Mr Hickey says.
The various motions due to be heard over three days early next month include six that concern discovery of documents. Mr Cosgrave also has a motion seeking to add new allegations about motion by Mr Cosgrave seeking to add new allegations that Mr Hickey carried out “secret” consultancy work while still a director of Web Summit.
