Ex-Elan chairman’s action settled

A SETTLEMENT was announced in the High Court yesterday in proceedings against Elan Corporation plc brought by a former chief executive and chairman of the pharmaceutical company, Donal Geaney, who claimed he was being denied share option entitlements worth up to $12 million.

No details of the settlement were disclosed when Michael Collins SC, for Elan, told Mr Justice Peter Kelly he was glad the case had been settled.

Counsel asked that the court receive the terms and that the matter be adjourned for five weeks during which time a “payment” would be made.

With the consent of Paul Gardiner SC, for Mr Geaney, Mr Justice Kelly received and filed the terms of settlement and adjourned the matter for mention on July 18.

Mr Geaney’s case was due to open before Mr Justice Kelly in the commercial division of the High Court on Monday and was scheduled to last three weeks.

Mr Geaney was in court on Monday but did not attend yesterday. He is ill and, to facilitate that illness, the court had planned to sit daily from 10am to 1pm except in situations when his presence was not required. However, on Monday, the parties asked for the case to be adjourned to yesterday saying they believed the short adjournment would be of benefit. The judge agreed to do so and the settlement was announced to the court yesterday.

In his proceedings, Mr Geaney claimed he had been denied his entitlements by Elan, which could exceed $12 million. He claimed he was given a remuneration package in November 1989 which included share options.

He further claimed that, following his removal from office, he had a phone conversation with Daniel Tully, a director of Elan, and Elan chairman Garon Aermen, who confirmed he would be treated in the same manner as other senior executives who left or would be leaving the company.

Mr Geaney claims that the effect of that conversation was that he would have 24 months from the date of the termination of his employment in which to exercise his share options. He says he worked up to December 2003 on a full-time basis and subsequently on a part-time basis because of a deterioration of his health. When the agreement expired, it is claimed, Elan unlawfully terminated his employment.

He contended the company wrongfully and in breach of agreed terms purportedly asserted that he was not entitled to exercise the share options held by him.

Elan denied the claims. It pleaded that Mr Geaney was granted a new two-year employment contract, with the relationship being severed at the end of the contract. At no stage did any negotiations take place in respect of extending the option exercise period post termination, the firm said.

Video link evidence from Mr Tully, who lives in the US and is ill, had already been heard by the court in a private sitting and would have been set out before the court had the case proceeded.