Judge asked to order firm to provide €3m security for costs of action

A judge has been asked to order a printing company to provide €3m security for the legal costs of its action over the loss of a valuable multi-year agreement to publish several newspapers.

Webprint Concepts Ltd, based in Mahon, Cork, is suing several parties in the Commercial Court over losing the contract as a result of what it alleges was the “willful” and “pre-packaged” restructuring of the Thomas Crosbie group.

All the defendants — Thomas Crosbie Printers; Thomas Crosbie Holdings; the group’s banker, AIB; the Irish Examiner’s new publisher, Landmark Media Investments; the TCH receiver Kieran Wallace; the newspapers’ new printer The Irish Times; and TCH directors Thomas and Alan Crosbie — applied yesterday to Ms Justice Mary Finlay Geoghegan for orders requiring Webprint provide security for costs of the case, to be heard in October.

Maurice Collins SC, for TCH interests, said the group had suffered a downturn in circulation and advertising since the late 2000s and had accumulated losses of €12m by the end of 2011.

The group had been attempting to renegotiate the terms of its printing contract with Webprint since 2011 in an effort to achieve annual savings of a net €3m to secure the future of its newspaper titles, he said.

Webprint was well aware of TCH’s financial difficulties through the sharing of confidential information, but its best offer would only have resulted in savings of €1.12m.

Mr Collins said AIB had appointed a receiver on Mar 6 and it led to an arrangement which had seen the group’s assets and titles transfer to a new company, Landmark, with the Irish Examiner now printed by The Irish Times.

Mr Collins said Webprint had characterised the arrangement as unlawful and improper. The court heard Webprint is claiming its printing agreement should remain in place as it had suffered estimated losses of €17m from the breach of the 15-year contract. In the alternative, Web-print wanted the chance to bid for the TCH group and newspaper titles or offer its printing services to the papers’ new owners.

However, Mr Collins said Webprint was aware that TCP was technically insolvent and the Thomas Crosbie group was dependent on the continuing support of AIB to keep trading. He said Webprint’s loss of the printing contract had resulted from the fact that TCP was insolvent and AIB’s entitlement to enforce its security over the Thomas Crosbie group.

AIB had examined other options before deciding receivership of the TCH group was the best way of protecting the bank’s own interests, he said.

Neither TCH nor Landmark had any intention to break the contract. However, Webprint had made such a claim as “a springboard for a variety of torts, conspiracies and unlawful acts”, said Mr Collins.

While TCH and Landmark had some overlapping of ownership and directors, he pointed out they were separate companies, as two thirds of TCH’s shareholders were not involved in Landmark, who had taken a significant risk in taking over the group and investing another €1m in the business.

It was a demonstration of the commitment of members of the Crosbie family to a business built up over generations, he said.

“It is an undisputable reality that the printing agreement could not be operated going forward,” said Mr Collins.

He claimed savings in excess of €3m had been achieved as a result of the new printing contract with The Irish Times.

Counsel for AIB said Webprint’s own financial difficulties were due in part to its own business model which was “massively reliant” on one customer and the fact that the TCH group had become insolvent.

The hearing continues today.