The High Court has been asked to drop a businessman’s allegation that he was fraudulently misled by Davy stockbrokers and 16 of his former employees when they allegedly made a multi-million dollar profit from the sale of his Anglo Irish Bank bonds.
Fifteen of Davy’s 16 employees say Patrick Kearney’s allegation was based on false briefs.
They allege that various statements and pleadings by Mr Kearney, one of the so-called “Maple 10” investors who received loans from Anglo to buy shares in the defaulting bank, are false and justify his case being dropped.
Mr Kearney, a property developer from Belfast, rejects her application, saying it is unfounded.
Mr Kearney and his company Kilmona Holdings hired Davy in 2014 to sell the bonds at the best market price to pay down the debt.
However, in a procedure initiated last year, it is alleged that the 16 Davy employees secretly made a profit of 25 million euros when they were resold.
Subsequently, the lawyer for most of the employees said that the profit made was 9 million euros.
Seven years ago, Mr. Kearney first sued Davy alleging that the bonds had been sold at undervalue, but the case was later settled.
In 2021, however, Mr Kearney said he had learned something he didn’t know after a central bank investigation into Davy in 2015 for breaking market rules, which led to a record €4.1million fine against the stockbroking firm.
Mr Kearney said it was only then that he learned the resale to the ‘O’Connell Partnership’ was an entity comprising 16 former Davy employees.
He said if he had known that when the previous case was settled, he would not have done so.
In his 2021 trial, he alleged fraudulent concealment, among other things.
He also sought a number of explanations, including that O’Connell Partnership was under the control of Davy, who was paid €207,000 to sell the bonds, a breach of loyalty and duty to him and his company.
He claimed he was unaware that the partnership included any of Davy’s employees, because when he asked Davy for details, he was told that it was not possible due to confidentiality reasons. The claims are disputed.
On Tuesday, 15 of the members of the O’Connell Partnership asked the court to set aside Mr Kearney’s claim as doomed. The 16th partnership member reserves its position in relation to a delisting request pending the hearing of the other 15’s request.
Marcus Dowling SC, for 15, said it was surprising that Mr Kearney had not filed a motion to amend his briefs “because even on his best day some of what he (Kearney) says is untrue and how he operates is made with untrue allegations”.
The lawyer said he relied solely on what was said in papers and letters held or previously presented to the court in seeking a strike.
The attorney said in papers being prepared for the 2015 case, Mr Kearney admitted he knew in November 2014 that the partnership was the buyer.
Mr Kearney subsequently claimed what he actually understood was that the partnership provided a loan to purchase the bonds, but said he did not know that the partnership was also the buyer, the lawyer said.
However, the settled 2015 case specifically claimed that the members of the partnership were Davy employees, the attorney said. But today Mr Kearney claims that this is being fraudulently concealed from him, he said.
The attorney said that objectively, based on documents, it was clear that Mr. Kearney knew the partnership was made up of Davy employees.
His case had to fail because it couldn’t be said now that Davy had tried to hide who was involved in the partnership.
It also had to fail because “a man cannot be deceived if he knows the truth”. Mr. Kearney cannot succeed in his allegation of misrepresentation because he knew the truth from what was said in the previously settled case, the attorney said.
The case continues before Mr. Judge Michael Twomey.
https://www.independent.ie/business/irish/ex-davy-staff-try-to-block-new-anglo-bond-deal-case-42234435.html Ex-Davy associates try to block new Anglo Bond deal case