A dispute concerning the management of the successful Fulfil nutrition bar business has come before the High Court.
Tom Gannon and Niall McGrath, who co-founded the business launched in early 2016 claim they have been excluded from participation in the management of Bartoni Ltd, the Dublin company behind Fulfil. They both own 25 per cent of the business.
The “significant” dispute over management was crystallised by the purported dismissal of both men as executive managers of Bartoni “supposedly executed” by its chief executive Brian O’Sullivan, Maurice Collins SC, for companies of the co-founders, said.
While Mr Gannon and Mr McGrath remain as directors of Bartoni, and, through their companies, continue to hold a combined 50 per cent shareholding in it, they do not have a majority on the board, counsel said.
They are concerned a directors’ meeting, brought forward to this Friday from an original date of March 26th, could lead to shares being vested in Mr O’Sullivan without their agreement.
As directors of Bartoni, Mr McGrath and Mr Gannon can attend the meeting but they don’t have control of the board and cannot block resolutions, counsel said.
While undertakings were sought to assuage their concerns about the meeting, those were “categorically refused”, Mr Collins said. In the circumstances, they wanted interim orders, even if those turned out to be unnecessary.
The court was also told, while there had been communications concerning a share incentivisation scheme for Mr O’Sullivan, Mr McGrath and Mr Gannon understood no specific agreement was reached and also understood the proposal concerning Mr O’Sullivan involved a share issue to him only in the event of a sale of the company.
In the circumstances, the judge said he was satisfied to grant interim injunctions, returnable to Monday, preventing any share creation or issue and essentially preserving the status quo.
Isle of Man
The proceedings are brought by Isle of Man-registered Santom Ltd and Torcaill Ltd, companies of Mr Gannon and Mr McGrath, against Mr O'Sullivan; Ivan Walpole, finance officer and director with Bartoni; another Isle of Man company, Vetranio Ltd, a 50 per cent shareholder in Bartoni and its principal Barry Connolly.
Mr McGrath and Mr Gannon have taken separate proceedings alleging wrongful dismissal and breach of contract of employment.
In the companies’ proceedings, it is claimed there has been an exclusion of Mr McGrath and Mr Gannon, the companies’ nominated directors of Bartoni, from participation in the management of Bartoni in a manner that is oppressive.
Mr Collins said there is a “significant dispute” about that claim but his side maintain that is the position.
The injunctions application was made ex parte on Wednesday. Although the Four Courts were closed due to the weather, Mr Justice Meenan heard the application due to the possibility of the Bartoni meeting on Friday.
Mr Collins said his side will later apply for a range of injunctions to continue pending the outcome of the proceedings. Those include injunctions restraining the creation or issuing of any new shares and/or the creation or granting of any options in shares in Bartoni, including any option or share issue to Mr O’Sullivan.
Other injunctions seek reinstatement of Mr Gannon and Mr McGrath as “co-founders” in the executive management of the company and restrain the board confirming Mr O’Sullivan as chief executive at the expiry of his probation period under his employment contract.
They want further orders restraining the board, unless it has consent of 75 per cent of shareholders, taking any steps to implement a proposed business plan prepared by Mr O’Sullivan last December.
