O’Reilly’s INM payoff case settledBy Ann O’Loughlin - Saturday, July 21, 2012
A High Court action by a non-executive director of Independent News and Media (INM) over a €1.87m exit payment to the company’s former CEO, Gavin O’Reilly, has been settled.
Mr Justice Brian McGovern, who came to the bench yesterday with a prepared judgment in the action brought by Paul Connolly, was told the matter had been resolved on Thursday.
Mr Connolly had sought a declaration that the payment to Mr O’Reilly was unlawful. The case was heard over three days last month before Mr Justice McGovern reserved his decision. The judge was due to give that decision yesterday when counsel for INM said the matter had been resolved.
Mr Justice McGovern asked when this had happened because he had spent many hours over the last two-and-a-half weeks working on the judgment, particularly in relation to two areas of relevant company law which had not been decided on before.
It seemed a "shocking waste of court resources and time" when there are other matters which needed to be dealt with, the judge said. A lot of other work had to be parked while he worked on this judgment, he also said.
Mr Howard said the settlement took place only on Thursday and the reason it had not occurred sooner was because the parties believed the original re-listing for the case was Oct 8 next. They wanted to apologise and wish the court could have been told sooner, he said.
Rossa Fanning BL, for Mr Connolly, also apologised and asked the matter be struck out with no order.
The judge also said that it was good the settlement had been reached yesterday rather than a week ago during which time the court might not have been informed.
"The third secret of Fatima was eventually revealed but this will not suffer the fate of seeing the light of day," the judge said, holding up the judgment.
In his action, Mr Connolly, a nominee of major shareholder Denis O’Brien, said the €1.87m payment was made with "indecent haste" and Mr O’Reilly presided over "a period of destruction" of the company’s share value.
He sought declarations the payment breached Section 186 of the Companies Act because it was approved by the board without being put before shareholders at a general meeting.
He was told the payment would not be referred to a general meeting and it had already been made to Mr O’Reilly on Apr 19 last, the same day it was approved.
His lawyers said the court had to decide whether the Companies Act 1963 required such "compensation" to be approved by members of a company at a general meeting.
INM’s lawyers argued the board was within its legal rights to make the payment because it had been approved on the basis of settling an employment dispute and to avoid litigation.