A printing company has brought a legal action after losing a valuable multi-year agreement to publish several newspapers as a result of what it alleges was a “wilful” and “pre-packaged” restructuring of the Thomas Crosbie media group.
One of the "principal objectives" of the restructuring of the Thomas Crosbie Holdings (TCH) Group was to enable TCH and TCP (Thomas Crosbie Printers Ltd) evade their existing contractual obligations to Webprint Concepts Ltd, the company's managing director Donagh O'Doherty said.
The net value of the 15-year printing agreement to Webprint was some €22.2 million or 70 per cent of its income, he said. Forty-one of its 46 staff at its Mahon Point, Cork, premises are on a two-day working week, with some facing possible redundancy, as a result of this “wilful scheme” to interfere with its contractual relations.
Following the restructuring, it seemed the same newspapers were published under the same titles by the same employees under direction of the same chief executive and by a company owned and controlled by the same individuals as TCH and funded by the same bank as TCH, he said.
The only differences resulting from restructuring were the The Irish Times was now printing the titles, there were unpaid debts owing to some suppliers of newsprint and, reportedly, the pension obligations of TCH where he had been told of a €22 million deficit, he said.
TCH was placed into receivership this month by its largest lender, AIB, with Kieran Wallace of KPMG appointed receiver. On the same day, TCH was acquired by Landmark Media Investments, a company owned by Thomas and Ted Crosbie. As part of the restructuring, an examiner was appointed to Post Publications Ltd, publishers of the Sunday Business Post .
The Irish Times is printing Landmark's titles, including Irish Examiner and the Evening Echo .
AIB has also provided financial support to Landmark.
Ulster Bank had also appointed a receiver over Webprint’s Mahon Point premises, on which a loan to TCP to build the premises was secured.
Yesterday, Declan McGrath SC, for Webprint, said the loss of the printing agreement, which dated back to January 2006 and had eight years to run, arose from “a premeditated plan in gestation for some time” which had had a profound impact on his client.
Mr Justice Peter Kelly said the claim appeared to be there was “an actionable conspiracy” involving interference with contractual arrangements.
He agreed to fast-track the action in the Commercial Court and fixed a provisional trial date for October 8th with any applications to have Webprint provide security for costs of the proceedings to be brought by end April.
The case is against Thomas Crosbie Printers Ltd; Thomas Crosbie Holdings Ltd; Bontury Ltd (trading as Landmark Media Investments); AIB; TCH receiver Kieran Wallace; The Irish Times Ltd; TCH director Thomas Patrick Crosbie and TCH chairman Alan Crosbie.
Webprint wants specific performance by TCP of the printing agreement, plus orders restraining TCP breaching that agreement or the other defendants causing, inducing or procuring breach of agreement by TCP. Alternatively, it claims Landmark is bound by the printing agreement.
It claims TCH is liable for loss and damage suffered by Webprint as a result of TCP’s alleged breach of agreement. It is also claiming damages for breach of contract against TCP, TCH and Landmark, plus damages for intentional interference with contractual relations against all the other defendants except TCP.
It claims Mr Wallace acted negligently and in breach of the Companies Act in transferring TCH’s print titles to Landmark without offering them for sale on the open market.
It claims loss of anticipated profits under the printing agreement; some €2.83 million in arrears due by TCP and exceptional employee costs likely to be incurred.
All of the defendants consented to the case being fast-tracked but several indicated they may seek orders requiring Webprint to provide security for costs. Mr McGrath said such applications will be resisted as this was a “clear” case where any financial difficulties of his client were caused by wrongdoing of the defendants.
Cian Ferriter SC, for the Crosbie side, said Webprint’s contract was with TCP which was subject of a winding up application for hearing next month. The “unpalatable reality” was TCP was “hopelessly insolvent” and incapable of performing the contract.
The action was fundamentally misconceived, Mr Ferriter added. There was “a big leap between being pre-planned and being illegal”.
