DCC chief executive Mr Jim Flavin was keen to continue his 20-year relationship with Fyffes after resigning as a director, the High Court was told yesterday.

Mr Kevin Feeney SC, on behalf of DCC and Mr Flavin, said that following his resignation as a Fyffes director, he (Mr Flavin) wrote to Fyffes chairman Mr Neal McCann on June 22nd, 2000. In the letter he said: "If it is your wish, we can draw a line and close a chapter on a 20-year business and personal relationship but that is certainly not my wish. I would like to resume a good, warm relationship and keep in touch from time to time.

"I would also be delighted to chat about the current business situation if that would be helpful and to be a sounding board for any thoughts or ideas you might have. I wish you every success in dealing with current difficulties..."

Cross-examining Fyffes chief executive Mr David McCann, Mr Feeney asked whether, in June 2000, Mr McCann had formed the view that Mr Flavin had price-sensitive information when the deals were done in February 2000.

Mr McCann said he did not know the answer. He was not saying he had not formed a view. It was clearly speculated about in the newspapers at the time, and he was sure it was something they had discussed.

Mr Feeney said it would have been a matter of significance, because Mr McCann would have had to seek legal advice, look at other share dealings that had been permitted at the same time for other directors who had similar information and decide the appropriateness of those dealings.

Mr McCann said he supposed that, at that time, it was not necessarily a matter of significance to him, in the sense that he had not dealt; it was Mr Flavin and DCC that had dealt, and any consequences of that were for Mr Flavin.

At that time they did not understand what causes of action there might be in connection with the dealing.

Mr McCann said he thought it was after a board meeting of June 30th, 2000, that a formal exercise took place to look at the events surrounding the dealing, and it was as a result of that, and as a result of legal advice, that he supposed they finally formed the view to pursue the claim against Mr Flavin and DCC.

Mr Feeney asked if the advice Fyffes sought on the day was limited to the issue as to whether or not Mr Flavin and/or Lotus Green and/or DCC could deal without the permission of Fyffes. Mr McCann said the advice, as he understood it, on the day was that it was an issue for Mr Flavin and DCC and not for Fyffes.

Mr Feeney referred to the profit warning issued at Fyffes' annual general meeting on March 20th, 2000, and said this had an effect on the share price. Mr McCann agreed that they surprised the market with the warning that their first-half results were going to be down.

Mr Feeney asked if it was Mr McCann's view that through March, April, May and June, 2000, the profit warning of March 20th was issued in a proper and timely manner.

Mr McCann said that with the benefit of hindsight, it might have been better had the company done things earlier, but leading up to March 20th it was the company's judgment that it had been doing things correctly.

Mr Feeney asked whether at a Fyffes board meeting of February 28th, 2000, Mr McCann was in a position to say to non-executive directors that there was information that might make it necessary to consider issuing a profit warning under the company's obligations in relation to Stock Exchange rules.

Mr McCann said the underlying information was known to executives and non-executives at the time. The information known to directors on February 28th was very clear. In fact, it was mentioned that they would have to be careful about what they said at the (subsequent) annual general meeting, which clearly envisaged the possibility of giving a warning.

The hearing continues today.