The O'Flynn construction group has set out "a good arguable case" entitling it to pursue global private equity fund Blackstone over an alleged conspiracy to take over key companies in the Cork-based group, the Commercial Court has ruled.
Mr Justice Brian McGovern today dismissed a pre-trial application by the US-based parent Blackstone company – Blackstone Group LLP – aimed at preventing developer brothers Michael and John O’Flynn and 82 of their companies suing it for damages over the alleged conspiracy.
The statement of claim in the action alleged conspiracy and an affidavit from Michael O’Flynn had set out in sufficient detail, at this stage of the proceedings, the matters alleged to connect the US parent company with the alleged conspiracy, the judge said.
He was satisfied the O’Flynn side had furnished reasonable particulars of their claim against Blackstone “and have done the best they can at this stage”.
However, the judge upheld arguments by the Blackstone side the terms of an earlier agreement between the O’Flynns and Blackstone precluded the O’Flynn side bringing proceedings in the Irish courts concerning proper construction of five of a total of eight disputed corporate loan facility agreements between O’Flynn companies and Nama.
In accordance with the “clear and unambiguous” terms concerning jurisdiction set out in that earlier agreement, any dispute concerning the five facility agreements is subject to the exclusive jurisdiction of the English courts and cannot be litigated here, he ruled.
The remaining three facility agreements are subject to Irish law and any disputes concerning them are subject to the exclusive jurisdiction of the Irish courts.
He was giving his ruling on pre-trial applications in proceedings by the O’Flynns and their companies claiming damages for conspiracy against various Blackstone companies over an alleged “careful and sophisticated plan” to achieve control of four key companies in the O’Flynn group.
The O’Flynns allege there was a “contrived” effort by Blackstone to create “an emergency” by calling in their personal loans at 10am on July 29th last and giving them two and a half hours to pay them. They are claiming damages for alleged conspiracy, inducement of breach of contract and interference with contractual relations.
Mr Justice McGovern's decision means the Blackstone parent company; London-based Blackstone Group and Irish based Carbon Finance Ltd may all be sued over the alleged conspiracy.
After the ruling, Paul Gardiner SC, for the Blackstone side, took issue with complaints by Michael Cush SC, for the O’Flynns, that Blackstone was seeking to delay the litigation.
When Mr Gardiner complained Mr Cush had repeatedly made such claims which Blackstone then had to repeatedly deny, the judge asked the parties to note there is no jury in the Commercial Court and to desist from “sound bites”.
The case arose after Carbon Finance last May bought €1.8 billion loans tied to O’Flynn Construction from Nama. On July 29th, Carbon secured High Court orders appointing an interim examiner to four key companies in the group.
In August, the O’Flynns were put back in charge of their business after the High Court found non-disclosure by Carbon in bringing its application for interim examinership.
Ms Justice Mary Irvine made orders preventing Carbon enforcing either personal or corporate loans demands, stood down the receivers appointed by Carbon and restrained new directors appointed by Carbon to the O’Flynn companies acting as directors of any O’Flynn company. She also ruled the O’Flynns had raised serious issues to be tried and the full trial of those is due to open later.
