LAWYERS ACTING FOR Web Summit founder Paddy Cosgrave have failed in their bid to stop a fresh High Court action from being taken against him by one of his former business partners.
Daire Hickey, a former director of Web Summit who co-founded the tech conference along with Cosgrave and David Kelly, has sued his former partner alleging the oppression of his rights as a minority shareholder.
Hickey, who owns a 7% stake in Manders Terrace Ltd — the company behind Web Summit — through his own company, Lazvisax Ltd, claims that majority shareholder Cosgrave deliberately sought to damage his reputation and to ensure that he received no value for his minority stake.
Hickey’s allegations are similar in nature to those of another minority shareholder, Kelly, who owns a minority 12% stake in Web Summit and recently sued Cosgrave in the High Court.
Cosgrave — who owns 81% of Web Summit’s shares — had also previously launched proceedings of his own against Kelly in both the United States and in Ireland, claiming that he breached his fiduciary duties to the company as a director.
Separately, Hickey has now sued Cosgrave and his company Proto Roto Ltd in the High Court, alleging that the Web Summit founder sought to damage his reputation and reduce the value of his stake in the company.
The case was listed for mention in the Commercial Court list this morning.
Kelley Smith SC, representing Hickey, told the court earlier today that the allegations fall under two separate categories — those that occurred in the period before Hickey stepped back from the day to day operations of Web Summit in 2017 and those which occurred after and only came to his attention due to Kelly’s own legal action against Cosgrave.
Hickey alleges that he was “forced out” as a director of the company in 2019, Smith said.
In affidavits relating to his own case against Cosgrave, Kelly has alleged that Cosgrave “harboured an intense animus” towards Hickey, against whom he pursued a “vendetta”.
Smith said this had only come to Hickey’s attention as a result of Kelly’s affidavits, filed earlier this month.
But Bernard Dunleavy SC, representing Cosgrave, moved to have the matter dismissed this morning.
He told the court that there had Hickey had inexcusably delayed bringing the proceedings against Cosgrave, given that many of the allegations contained in Hickey’s affidavit were “historic” in nature.
Many of the incidents alleged to have occurred did so before 2019, some as long ago as 2012 and 2013.
Moreover, he said that Hickey had been a director at the time that many of the incidents are alleged to have taken place.
Judge Denis McDonald said he had some sympathy for this position and that he was “unimpressed” with the historic nature of some of Hickey’s allegations.
However, he said many of his most serious claims related to incidents that are alleged to have occurred after he stood down from his role with Web Summit and which only came to Hickey’s attention in recent weeks due to Kelly’s own action.
Judge McDonald ruled the case can proceed. He gave Cosgrave’s side until 24 January to file a replying affidavit and until 31 January to deliver its points of defence.
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