A High Court dispute between well-known house builder Maplewood Homes and a Bain Capital investment company is about an “early exit strategy” in an attempt to alter a jointly agreed project for about 500 houses in south Dublin, it has been claimed.

Maplewood director Alex Brett said in an affidavit that investment company Broadhaven Credit Investments had sought to frustrate the business of the joint venture they both set up to build homes in Dublin to the detriment of that venture, Old Court Investments Ltd.

Far from the Maplewood side acting in an oppressive manner in the governance of Old Court, as alleged by Broadhaven, Mr Brett says Broadhaven had unlawfully attempted to change the agreed development plan and paralysed the functioning of the company, which has already built hundreds of houses under the agreement in Ballycullen, south Dublin.

Mr Brett made the claims in a replying affidavit to proceedings by Broadhaven against him, his fellow Maplewood Homes director Michael Whelan snr, and two companies they are involved in as shareholder representatives in Old Court.

The case was entered into the Commercial Court last week.

This week, after Mr Justice David Barniville was told efforts were being set up by the parties to deal with the matter through mediation, he adjourned the case for three weeks.

Mr Brett said Broadhaven, which invested €16.2 million in the joint venture, has already had a €13.5 million return in a tax-free-interest payment, with another €5 million available for immediate distribution, and where only about 40 percent of the project remains to be developed.

‘Early return’

Broadaven’s original investment was designed to take advantage of a tax arrangement that enabled money advanced through a Cayman islands company to be routed through special tax saving “Section 110” loans, he said.

Mr Brett said Broadhaven director David Cullen “openly declared” the early exit strategy in a January 2019 meeting in which it sought an early return on its investment and to cease further investment.

It attempted to do this, despite the fact it was not the preferred strategy of the Maplewood side, by selling its shares, but a price could not be agreed.

The Maplewood side was and is willing to allow the share sale to a third party but, rather than accept this, Broadhaven refused to commence the next phases of building “to forcibly complete their early exit strategy”, Mr Brett said.

Mr Cullen had claimed that it was an unsuccessful move to terminate the involvement of Maplewood construction firm Capami in future building that led to deadlock in the boardroom dispute between the parties.

Broadhaven claimed Capami had failed to get certain planning permissions for future developments.

Mr Brett said Broadhaven’s own project monitor had never raised any issues with Capami’s performance and that the alleged failure by Capami was contrived.

Protracted stalemate

Mr Brett strongly denies Mr Cullen’s claims in relation to resolutions passed at an extraordinary general meeting of Old Court in January and says they were passed lawfully and within the powers of shareholders.

Instead of accepting the lawful exercise of shareholder rights, Broadhaven “simply attempted, unsuccessfully, to frustrate the lawful holding of the egm”, he said. The egm was called after “protracted stalemate and impasse” at board level.

Broadhaven has been acting in an oppressive manner in a number of ways that have been damaging to the company, he said. These include refusing to allow Old Court to continue with the development of lands, insisting on the sale of the pre-construction lands despite that not being in the best interests of the company and attempting to remove Capami without valid reason.

In relation to a claim that another Maplewood firm bought land from St Anne’s GAA club in Bohernabreena without Broadhaven’s knowledge, he said Broadhaven was kept updated on that transaction.

He said Broadhaven also wrongly said the Maplewood directors refused to consider a joint development strategy with Nama, which owns adjoining land. It had in fact previously worked with Nama in gaining permission for major infrastructural works in the area, he said.