Rose of Tralee shareholder relationship 'irretrievably' broken down, court told

A solicitor for US-based shareholder Richard Henggeler said his side has 'very serious concerns' about the manner in which the company has been run in recent years

File Picture: Host Daithí Ó Sé on stage with the 2019 contestants in the Rose of Tralee.  Picture: Eye Focus LTD

The business relationship between shareholders in the company behind the Rose of Tralee Festival has “irretrievably” broken down, the High Court has heard.

US-based shareholder Richard Henggeler has brought a claim alleging shareholder oppression against Kerry Rose Festival Limited, its chief executive Anthony O’Gara and John McCarthy, who is a director.

Mr Henggeler, whose wife is a Kerry native, says he invested €800,000 in the company after his 27-year-old daughter Dorothy, a former contestant, died of a brain hemorrhage in 2014.

The 31.1% company shareholder alleges his good intentions, in providing funding in his daughter’s memory, were “taken advantage of” as, he says, most of the investment went to existing shareholders and only a portion went to the benefit of the festival itself.

In responding court filings, Mr O’Gara says he and the other respondents have always put the interests of the festival first and the operation has been professionally managed. Mr Henggeler’s allegations, including of minority oppression, are denied.

Gary McCarthy SC, for Mr Henggeler, said it seems the parties involved in this “acrimonious” dispute agree there has been an “irretrievable breakdown” between them.

He told the High Court on Monday that things cannot move forward until Mr Henggeler gets more information so Grant Thornton accountants he has engaged can conduct a proper evaluation of the company.

His client has asked for books and records but is now only being offered information provided to an annual general meeting, which is contrary to earlier assurances, counsel said.

Mr McCarthy, instructed by Cadogan O’Regan LLP solicitors, said his side has “very serious concerns” about the manner in which the company has been run in recent years. He referred to a replying affidavit from the respondents that says the company has been run as a not-for-profit.

The court heard Mr O’Gara, with an address in Ballinvosherig West, Tralee, owns 55.9% of the company’s shares, John McCarthy owns 6.6% and two other men who are not defendants in the case own a combined 6.5%.

Barrister Peter O’Brien, for the defendants, said his clients have complied fully with their obligations in so far as they exist.

They are willing to sell their shares, to purchase Mr Henggeler’s at market price, or to sell shares to a third party, said counsel, instructed by McMahon O’Brien Tynan Solicitors. Ms Justice Miriam O’Regan adjourned the case until November.

Mr Henggeler’s case asks the court for an order directing Mr O’Gara and John McCarthy to sell their shares to him.

Richard Henggeler's claims

In an affidavit, Mr Henggeler claims he met with Mr O’Gara in 2014 and said he and his wife were willing to contribute €1 million to the festival. He alleges Mr O’Gara said the company could not accept a donation but a positive contribution could be made by purchasing a shareholding, which Mr Henggeller agreed to.

He says he transferred €800,000 in two transactions but was never given official paperwork for them or valuations of the company used to calculate the number of shares he would be entitled to. He alleges everything was agreed verbally and details were to follow but these never came.

Mr Henggeler, who owns the Rose Hotel and has an address in Maryland, says it was a very difficult time given the recent loss of his daughter and his interest in providing the festival with funding in her memory. He alleges he understood that Mr O’Gara used €550,000 to pay down a personal debt.

Anthony O’Gara's response

In a responding affidavit, Mr O’Gara says that, upon incorporating the festival in 2004, the original shareholders used their own money and borrowings to facilitate the operation. He says about €500,000 was invested by them during the first two years of the company.

He says he was entirely open and transparent with Mr Henggeler at the time he purchased shares and that some proceeds would be used to pay down a personal debt.