A businessman claims Davy Stockbrokers was negligent in advising him to sell investment bonds for around €5.58m which he says was at a significant undervalue.
Patrick Kearney and Kilmona Holdings Ltd are suing J&E Davy, trading as Davy, over advice the stockbrokers allegedly gave in 2014 on the sale of 27m Anglo Irish Bank callable subordinated floating bonds.
The case was admitted to the Commercial Court list by Mr Justice Brian McGovern yesterday, on consent between the parties.
In an affidavit, Mr Kearney, who lives in Queensway Quay, Gibraltar, says he and a company called Pattan Sl were advanced a loan for €18.4m by the former Anglo Irish Bank in 2009 to buy the bonds.
Anglo’s successor, IBRC, later assigned the benefit of the loans to a company called Stapleford Finance Ltd.
In 2014, Mr Kearney engaged LeBruin Private Ltd to advise him on how to deal with his debt obligations to Stapleford.
Following discussions involving Mr Kearney, LeBruin and Tony O’Connor, who Mr Kearney says was an employee of Davy, it was decided Davy would sell the bonds for a price which would discharge the €2.36m debt to Stapleford and leave a profit which would be divided between him LeBruin and Davy.
The bonds were sold for 20.25c in the euro, realising a total price of around €5.58m.
However, on the day the sale took place, November 14, 2014, Mr Kearney says he met with an investment banker who told him he did not believe 20.25c was the true value of the bonds.
The banker later agreed to buy them for 26c, later rising to 32c, but Mr Kearney says he was dissuaded by Davy and LeBruin from doing so as he was already legally committed to selling.
Mr Kearney says LeBruin issued proceedings against him and Kilmona Holdings, seeking judgment for €900,000 which it says represents its share of the profits from the sale of the bonds.
Mr Kearney has counter-claimed against LeBruin.
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