Blackstone tries to get O’Flynn conspiracy claims dismissed

Companies in the Blackstone Private Equity group have asked the High Court to strike out claims that they conspired to take over several companies of brothers Michael and John O’Flynn.

The claims, where damages are being sought for the alleged conspiracy, form part of an action brought by the O’Flynns and 82 companies within their group against Carbon Finance, its UK parent the Blackstone Group, and its US parent the Blackstone Group International Partners.

Lawyers for the O’Flynns have opposed the application.

The action arises after Carbon acquired €1.8bn in loans tied to O’Flynn Construction from Nama in May. Within weeks, Carbon sought to appoint receivers and an interim examiner to several companies within the construction group.

This was done after Carbon made demands for the immediate payment of €16.6m in personal loans. The O’Flynns opposed those moves. Michael O’Flynn said those monies could have been raised had reasonable time to repay the monies been afforded.

In the High Court last month, the O’Flynns succeeded at having both the interim examiner and receivers removed.

Ms Justice Mary Irvine found Carbon had not acted in utmost good faith and had not fully disclosed all the relevant information when it asked the High Court to appoint an examiner to the O’Flynn companies.

The judge said inadequate time was given to the O’Flynns to repay personal loans, which led to the appointment of receivers. The judge said this invalidated the appointment of receivers.

Directors appointed by Carbon to the companies were removed. The judge also granted an order reinstating the O’Flynn directors who had been ousted. A full trial of the dispute has been fixed for a date in late October.

In a pre-trial motion yesterday before Mr Justice Brian McGovern, lawyers for Carbon and its UK and US parents argued that claims they engaged in a conspiracy should be dismissed.

Paul Gardiner, for Carbon and the Blackstone companies, said that “there was simply no evidence of a conspiracy” in documents put before the court by the plaintiffs. All that was before the court were “mere bald assertions” by the plaintiffs that a conspiracy had occurred, counsel said.

There were no particularised details in the claim of any meetings or events that could allow a court to conclude that a conspiracy involving the defendants had occurred, counsel said.

Brian O’Moore, for the O’Flynns, said there was evidence the defendants had conspired to remove the brothers from their companies in “a coup”.

He said the defendants’ appointment of receivers and an examiner to the O’Flynn companies was evidence of “elaborate and sophisticated, yet ultimately hamfisted, blitzkrieg against the O’Flynns”.

Mr Justice McGovern reserved judgment.