Second Web Summit Case Added to Fast Track List Regarding Alleged Shareholder Oppression
A High Court judge expedited in the Commercial Court a second case of alleged oppression of shareholders in the Web Summit dispute.
Lazvisax Ltd stock, held by former Web Summit director Daire Hickey, whose company owns a 7% stake in the main events company, follows an earlier separate case by the other minority shareholder , David Kelly and his company Graigueridda Ltd.
Judge Denis McDonald on Monday said the Lazvisax case should be put on the fast-track list, as Mr Hickey said he only recently learned of allegations of attempts to destroy his reputation and undermine his shareholding.
The judge said he was not impressed by the historical allegations made by Mr Hickey, regarding a period when he (Hickey) was an employee and director of the Web Summit company, Manders Terrace Ltd, which never aroused no action on his part in the past.
Manders Terrace and Proto Roto Ltd, the company through Web Summit’s managing director, Paddy Cosgrave, owns 80 percent of the company’s shares, along with Mr. Cosgrave, are respondents in Mr. Hickey’s stock, who runs a public relations firm in New York City.
The respondents “categorically deny” the allegations and had until January to file documents providing their response to the allegations.
The judge said the court was faced with allegations which at first glance would suggest that Mr. Hickey only recently learned, through conversations with Mr. Kelly, that Mr. Cosgrave attempted to destroy the reputation. of Mr. Hickey and undermine the value of his shareholder base. .
On this basis, the judge said, he did not believe that an application for admission of the case to the commercial roll could be refused for delay, as the respondents allege.
The judge also expressed his surprise that parts of Mr. Hickey’s affidavit, containing the allegations, were published in the media and he was therefore aware that the respondents wanted time to deliver an affidavit in response.
It was under the circumstances in which the allegations were made and in light of the “extraordinary fact” that the details of Mr. Hickey’s affidavit were made available to the newspapers in advance, he said. declared.
It seemed to the judge that the respondents should be given the opportunity to respond and he therefore gave guidance as to how exhibits and pleadings were to be exchanged.
The judge also said it would be possible that the Hickey case could be dealt with alongside the separate oppression proceeding by Mr Kelly who filed a supplementary affidavit for the Lazvisax case supporting Mr Hickey’s claim according to which he only recently learned some questions.
“Very egocentric and volatile”
Previously, Bernard Dunleavy SC, on behalf of the Respondents, had objected to the listing of the matter on the commercial list given the delay in doing so and in circumstances where most of the allegations were historical in nature.
Kelley Smith SC, for Mr Hickey’s Lazvisax company, said there had been no culpable delays. The most recent allegations were something Mr. Hickey was unaware of as he stepped down as director of the Web Summit company in 2019, she said.
Mr. Hickey, in an affidavit, alleged that during his work for the Web Summit he realized that Mr. Cosgrave “is a highly self-centered, manipulative, volatile and vindictive individual.”
Mr Cosgrave, he said, demands nothing less than unsupervised control of all the affairs of the company, seeking to manage it “entirely for his own benefit and without any oversight by the board of directors. administration or anyone “. Mr. Cosgrave, he alleged, has an explosive temper which he frequently “wields against employees” and his conduct has been and continues to be extremely damaging to the business and reputation of the company.
He said he recently learned from Mr Kelly that following his departure from Web Summit, Mr Cosgrave and his company, Proto Roto, behaved responsibly and, in several cases, deliberately intended to undermine shareholder value. by Mr. Hickey. Mr. Hickey alleged a failure to adhere to corporate governance standards, a concerted strategy to force him out of the company, a refusal to comply with a profit-sharing agreement, the use of company funds business without proper authorization or oversight and a concerted strategy to damage its reputation. Among the allegations he makes is that when businessman Denis O’Brien stopped sponsoring the Web Summit, Mr. Cosgrave then “formed the opinion that Mr. O’Brien was involved in. the support of the Dublin Tech Summit ”. In recent years, he said, Mr. Cosgrave “waged a campaign of abuse against Mr. O’Brien via his Twitter account, despite a close relationship with the businessman in the early years of the Web. Summit “.