Dispute over Mean Fiddler sale resolved after payment

A legal action to compel a company involving promoter Denis Desmond, to pay £5.3 million (€6.2m) relating to a deal for acquisition of the Mean Fiddler Music Group has been almost fully resolved after a bank draft for that amount was received last Friday.

The proceedings by Blue Hawk Ltd, an Isle of Man incorporated company, against Gaiety Investments, an unlimited liability company with registered offices at Harmony Row, Dublin 2, were before the Commercial Court yesterday via an application to have the latter firm admitted to the court’s list.

However, Denis McDonald SC, for Blue Hawk, said his side had received a bank draft last Friday for the £5.3m due. Counsel said the only issues outstanding were related to interest and costs and he asked that the case be admitted and adjourned for a week to see if those issues could be resolved.

Mr Justice Peter Kelly said he would admit the proceedings and note that payment of £5.3m had been made. He also noted a fee of €15,975 due to PricewaterhouseCoopers (PwC) from Gaiety had been paid late and that only issues related to interest and costs remained.

In its action, Blue Hawk claimed it had reached an investment agreement with Gaiety in April 2005 under which it agreed to loan Gaiety £1.937m plus additional sums subject to conditions, for the acquisition by Hamsard Ltd of the Mean Fiddler Music Group plc.

Blue Hawk also claims Gaiety had committed to subscribing for shares in the company, to lending further sums to the company and to transferring certain interests to Blue Hawk subject to conditions. It claimed Gaiety agreed to transfer, among other interests, the beneficial ownership of a 15.8% interest in a loan of £9.936 million from Gaiety to Hamsard Ltd.

It was further claimed Gaiety had granted Blue Hawk the option to require Gaiety to purchase Blue Hawk’s interests at fair value at any time. Blue Hawk said it notified Gaiety on March 19th last of its intention to exercise the option requiring Gaiety to purchase its interests but that the sides were subsequently unable to agreed on the value of those interests. In July last, PwC was appointed to determine the fair value at fees of €15,975 each from Blue Hawk and Gaiety.

On November 3 last, PwC determined the fair value as £5.35 million and Blue Hawk claimed Gaiety was obliged to pay that sum by November 10 last but had failed to do so after which proceedings were issued.