A businessman claims Davy stockbrokers were negligent in advising him to sell investment bonds for around €5.58 million which he says was significantly below their true value.

Patrick Kearney and Kilmona Holdings Ltd are suing J&E Davy, trading as Davy, over advice the stockbrokers allegedly gave in 2014 on the sale of €27 million Anglo Irish Bank callable subordinated floating bonds.

The case was admitted to the Commercial Court list by Mr Justice Brian McGovern on consent between the parties.

Separately, Mr Kearney was also one of the so-called Maple 10 investors who bought Anglo shares in 2008 as Seán Quinn’s holding in the bank was being reduced.

In an affidavit, Mr Kearney, who lives at Queensway Quay in Gibraltar, says he and a company called Pattan Sl were advanced a loan for €18.4 million by the former Anglo Irish Bank in 2009 to buy the bonds.

Debt obligations

Anglo’s successor, IBRC, later assigned the benefit of the loans to a company called Stapleford Finance Ltd.

In 2014, Mr Kearney engaged LeBruin Private Ltd to advise him on how to deal with his debt obligations to Stapleford.

Following discussions involving Mr Kearney, LeBruin and Tony O’Connor, who Mr Kearney says was an employee of Davy, it was decided Davy would sell the bonds for a price which would discharge the €2.36 million debt to Stapleford and leave a profit which would be divided between him LeBruin and Davy.

The bonds were sold for 20.25 cent in the euro, realising a total price of around €5.58 million.

However, on the day the sale took place, November 14th, 2014, Mr Kearney says he met with an investment banker who told him he did not believe 20.25 cent was the true value of the bonds.

The banker later agreed to buy them for 26 cent in the euro, later rising to 32 cent.

But Mr Kearney says he was dissuaded by Davy and LeBruin from doing so as he was already legally committed to selling.

Mr Kearney says he now believes the price represented by Davy was below their market value and that Davy failed to disclose to him the conflict between his financial interests and theirs.

Proceedings

Mr Kearney also says that LeBruin has issued proceedings against him and Kilmona Holdings (of which Mr Kearney is a director), seeking judgment for €900,000, which it says represents its share of the profits from the sale of the bonds.

Mr Kearney has counter-claimed against LeBruin