Michael O'Flynn case will have an 'impact on the entire insolvency system', court told

The High Court is hearing submissions on whether it is the appropriate court to hear an application by a company, whose shareholders include rugby star Ronan O'Gara, to set aside a Personal Insolvency Arrangement

Michael O'Flynn's appeal against the dismissal of his own challenge against the PIA, heard by the Supreme Court, will go ahead in June. File picture: Larry Cummins

A judge is hearing submissions at the High Court on whether it is the appropriate court to hear an application by a company whose shareholders include rugby star Ronan O'Gara and businessman Michael O'Flynn relating to the Personal Insolvency Arrangement made in favour of fellow shareholder John O'Driscoll.

The company Ezeon Entertainment Ltd now want the High Court to set aside its order made in July 2022 where an appeal brought by businessman Michael O’Flynn against a Circuit Court order approving Mr O’Driscoll’s PIA was dismissed.

Ezeon Entertainment Limited purchased a Cork-based pub called 'The Silly Goose' in 2007. Mr O'Gara, Mr O'Flynn and Mr O'Driscoll who are known to each other were equal shareholders in the venture, which was funded by loans from Anglo Irish Bank.

Ezeon is seeking to set aside the order citing concerns about the alleged misappropriation of a total of just over €15,000 in company funds allegedly by Mr O'Driscoll at different times in 2019. Mr O’Driscoll strenuously denies all such claims.

Mr Justice Alexander Owens is deciding on a preliminary issue whether he has jurisdiction to hear the application.

In the High Court on Monday, Counsel for Ezeon, Martin Hayden SC with Keith Farry BL, submitted the O’Driscoll PIA process was “operated at a level and speed which is extraordinary”. He added it had been signed off over a bank holiday weekend in March 2022.

“The whole exercise is getting it over the line where it can’t be challenged,” Mr Hayden said. Counsel said the decision of the court in this case will have an “impact on the entire insolvency system.” 

Mr O'Driscoll was granted a PIA by the Circuit Court in March 2022. That decision was upheld on appeal to the High Court last July.

In separate proceedings before the High Court, Mr O'Flynn sought to overturn the PIA over the alleged debt owed to him. He was prevented from doing so after the High Court found that he lacked the legal standing to do so.

Mr O'Flynn’s appeal against the dismissal of his own challenge against the PIA, heard by the Supreme Court, will go ahead in June.

In a sworn statement, Mr O'Driscoll denies all the claims against him and says that at no point did he misappropriate the money as alleged or that he had done anything improper. He accepts that the money was withdrawn from the company without the other shareholder's prior knowledge, but says he did this as repayment of monies he was owed.

Any suggestion that he did so, he adds, is "entirely incorrect." He said that he had put the money into the company, at a time when it was not successfully trading, at the insistence of the other shareholders.

He also said that he had agreed to re-introduce the monies into the company when Mr O'Gara and Mr Flynn felt it necessary to do so.

Previously, the court heard that in 2014 Mr O'Flynn took over the borrowings and refinanced Ezeon for €2.2m, which had risen to €2.5m by 2018. Arising out of that debt it is alleged that Mr O'Driscoll, from Ovens in Cork, owes at least €950,000 to Mr O'Flynn.

Ezeon claims that because it was never given any notice of Mr O'Driscoll's initial application for protection from his creditors the company was never received a proper opportunity to object to him being granted a PIA. It has further concerns over the categorisation of Mr O'Driscoll's alleged debt to Ezeon.

The case continues.