DEVELOPER BERNARD McNamara has been accused at the Commercial Court of seeking to frustrate bankruptcy proceedings against him by bringing proceedings against five former business associates. He is claiming €101 million in damages over alleged breaches of a 2004 shareholders agreement.
The proceedings by Mr McNamara are against businessmen Gary Smith, Hazelhatch, Newcastle, Co Dublin; Ivor Dougan, Booterstown, Co Dublin and Paschal Taggart, Fitzwilliam Square, Dublin; Terry Cooney, a tax consultant of Fitzwilliam Square, Dublin; and Shane Taggart, a banker, Brompton Road, London.
The case dates back to Mr McNamara and the five coming together in 2004 to acquire properties within a site adjacent to Grafton Street, Dublin to build a commercial development.
The proceedings by Mr McNamara against the five were transferred to the Commercial Court yesterday on application of the five and on consent of Mr McNamara.
Bernard Dunleavy, for Mr McNamara, said his client denied his action was an attempt to stymie bankruptcy proceedings by two of the five, listed for October 22nd. The case was about construction of various business documents related to the shareholders agreement between the sides.
Mr Justice Peter Kelly agreed to transfer the proceedings and listed the case for mention on November 1st. It was up to the bankruptcy judge to decide what to do about the matters before him on October 22nd, Mr Justice Kelly added.
The bankruptcy petition against Mr McNamara was issued last June by Mr Smith and Mr Dougan over his failure to pay a sum agreed under a settlement of court proceedings. The five had sued for €7.5 million arising from an option deed of September 2004, under which they claimed they granted Mr McNamara the option to require them to sell shares in a company set up to carry out the development at a price in accordance with that deed. The company was Novorstan Ltd, Clanwilliam Court, Dublin.
Mr McNamara consented last February to a €2.11 million judgment order against him in favour of Mr Smith and Mr Dougan. They sought the judgment over Mr McNamara’s failure to make all payments agreed as part of an October 2008 settlement.
Under that settlement, Mr McNamara was to pay €5 million to the plaintiffs by December 2008 and a further €2.5 million by January 29th. The €5 million was paid over but Mr Smith and Mr Dougan claimed failure to pay other sums due to them by January. They claimed €2.11 million was due and judgment for that sum was entered against Mr McNamara on February 15th.
After alleged failure to pay that, Mr Smith and Mr Dougan brought the bankruptcy proceedings. In opposing those proceedings, Mr McNamara claims the five are required to release him from €101 million in guarantees and indemnities provided by him under the shareholders agreement of 2004.
Mr McNamara claims the level of debts owed by Mr Smith and Mr Dougan to him is substantially greater than the €2.1 million judgment obtained by them against him, so there is no debt sufficient to entitle them to petition for his bankruptcy.
