The High Court has described as "less than satisfactory" the outcome of legal proceedings brought against disgraced investment adviser Mr Tony Taylor and his wife arising from the collapse of Mr Taylor's investment group. While approving settlement of the case yesterday, Ms Justice Laffoy noted the settlement will not meet the costs of the action.
Under the settlement, Mrs Shirley Taylor is to receive some €335,000 of the proceeds of sale of the Taylor's former home at Anglesea Road, Dublin, including €27,000 towards the cost of legal proceedings.
Some €262,000 which would have been Mr Taylor's share from that sale is to go to the liquidator of the group, Mr Paddy McSwiney, for distribution between three companies (Taylor Asset Managers Ltd, Taylor Investment Group Ltd and Rolyat Ltd). The three are to receive 70 per cent, 20 per cent and 10 per cent respectively.
Ms Justice Laffoy was told yesterday by Mr John O'Donnell SC, for Mr McSwiney, that little, if any, of the €262,000 sum is expected to go to the group creditors, given the costs incurred in the liquidation.
The liquidator had initiated proceedings against both Mr and Mrs Taylor in 1999 arising from the collapse of the Taylor group. Mr McSwiney had sought in the proceedings to have Mr Taylor made personally liable for the group collapse. However, the proceedings were adjourned as Mr Taylor was in prison in England.
Mr Taylor was later extradited to the Republic and, in October 2001, was convicted of fraud and given a five-year sentence. As he had spent a period on remand up to his trial and also some time in prison in England prior to his extradition here, that time was taken into account and he was released from jail in May 2003.
Mr McSwiney's action against the Taylors under Section 204 of the Companies Act was to open next Thursday, but Mr O'Donnell, for the liquidator, told Ms Justice Laffoy, who was presiding over the High Court Examiner's list yesterday, that the case was not proceeding and asked the court to approve terms of settlement.
The judge was told that monies remained unpaid, including some €58,000 to the Revenue Commissioners. She also heard that the only assets the Taylors had related to the sale of the house at Anglesea Road.
That property was sold by National Irish Bank after the disappearance of the Taylors in 1996. Some of the proceeds of the sale were frozen in a bank account pending the outcome of the liquidator's proceedings.
The judge noted that, even when Mr McSwiney gets control over Mr Taylor's €262,000 and after the liquidator's costs and meagre expenses are paid, there would be a considerable shortfall of some €100,000 without taking into account other work to be done in the matters, including applications under Section 150 of the Companies Act.
She said the liquidator and the court had to take a pragmatic view. Even if the liquidator won, there was just €262,000 available, with other costs outstanding. The claim against Mrs Taylor was also unlikely to succeed.
While she had some misgivings about the measure of €27,000 for Ms Taylor's costs, the judge said she would approve the settlement. She noted that if she were to insist that the costs issue be referred to a legal costs accountant, that would only create further costs.
In those circumstances, she was prepared to approve the settlement and the distribution of the €262,000 between the three companies. This was "a less than satisfactory outcome" but the alternative was "throwing good money after bad".
