Mediation urged in bitter row between cinema owners

A High Court judge has urged mediation of an “extraordinarily bitter” dispute affecting the Dublin Cinema Group, operator of the Savoy and Screen cinemas in the capital.

Mr Justice Peter Kelly made the remark yesterday when transferring to the Commercial Court two sets of proceedings relating to the Dublin Cinema Group which, he noted, is effectively owned in equal part by two families, the Wards and Andersons.

This was an extraordinarily bitter dispute and he believed, instead of battling it out in court, the sides should instead enter mediation, the judge said. While he could not compel them to do so, the festering of such a bitter commercial dispute in the courts was of no benefit to anyone.

Paul Ward, of Mount Merrion Avenue, Dublin, has brought a derivative action — an action by a shareholder on behalf of a company — against Paul Anderson, of Shrewsbury Rd, Dublin, and Omniplex Holdings.

Mr Anderson and members of his family, including his son Mark, own Omniplex Holdings, with registered offices at Fitzwillian Square, Dublin. Mr Anderson is also the chairman of the DCG board, while Paul Ward is the company secretary.

Mr Ward, who secured the necessary leave to bring the derivative action from the High Court last month, alleges that Mr Anderson was approached in 2009 with an opportunity to open a multiplex cinema in Dublin’s St Stephen’s Green Centre and had, through Omniplex Holdings, entered into an agreement to operate such a cinema.

In doing so, Mr Ward alleges Mr Anderson had breached his fiduciary duties to DCG, was acting contrary to the best interests of DCG, and had created a conflict of interest between his interests and those of DCG.

It is alleged that Mr Anderson used confidential information of DCG to assess the business opportunity of the St Stephen’s Green centre cinema. The operation of a multiplex cinema at St Stephen’s Green Centre would cause considerable damage to the Savoy and Screen cinemas and divert business from them, says Mr Ward.

Among several orders being sought in that case, Mr Ward wants an order restraining Mr Anderson participating in the management, operation, or ownership of the multiplex cinema, and also wants judgment against the defendants over alleged unjust enrichment.

In the second action, Mr Anderson has petitioned for an order winding up DCG, with registered offices at Stillorgan, Dublin.

While he and Mr Ward have been involved in the business of DCG since about 1984, the relationship between the Ward and Anderson families has irretrievably broken down and a situation of deadlock exists to such an extent the company should be wound up, he claims.

Mr Anderson alleged Mr Ward has, in the derivative action, made “untrue” and “unfounded” allegations, including that Mr Anderson had “leveraged” his position as chairman of DCG to obtain increased discounts and rebates from suppliers to companies controlled by Mr Anderson’s family, and of diverting payments due to DCG to such companies.

Mr Anderson also rejected claims of an agreement between the wider Ward and Anderson families, which have extensive interests in the cinema sector across Ireland, to the effect neither will compete with any jointly owned company in the cinema business.

Mr Ward and his wife, Mary, had repeatedly sought to have Mr Anderson removed as chairman of the DCG board. DCG is non-functioning at board level, he also claimed.

Since Mr Ward’s father Leo retired and was replaced by Ms Ward, without any consultation with the Anderson side, a fundamental split has occurred in the partnership, he also claimed. The fact that the owners of DCG are not on speaking terms creates obvious potential for future difficulties, he added.

DCG has very significant cash reserves which are more than adequate to discharge all liabilities of the company, Mr Anderson added.

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