Directors of firm that sells DAF trucks allege shareholder oppression
Posted on 25th July 2022 at 22:35
Court hears about ‘bitter dispute’ concerning running of the company and closure of DAF in Cork
Two shareholders and directors of a company that has sold DAF-brand trucks for the last 35 years claim an attempt is being made to deprive them of the value of their €8 million shareholding, it has been claimed in the Commercial Court.
Patrick Ferriter, who is also chairman of DAF Truck Services (Cork), and his son Stephen, who is managing director, claim it involves plans to move sales of trucks from Cork to Dublin-based DAF Distributions Ireland (DDI) Ltd.
They say it will have a “catastrophic effect” on the Cork business and as a result, have brought proceedings under the Companies Acts alleging shareholder oppression.
Their case is against Gorzow Ltd, Kolopos Holdings Ltd, and Zamosc Ltd, which hold a majority of shares in the company and are primarily owned by DDI.
The case was admitted on consent to the Commercial Court on Monday by Mr Justice Denis McDonald, who adjourned it to next January.
Gary McCarthy SC, for the Ferriters, said this was a “bitter dispute” about the running of the company and the closure of DAF in Cork and its transfer to Dublin.
Rossa Fanning SC, for the respondent companies, said the Ferriters’ claims are hotly contested and a review of DAF Cork had “uncovered significant irregularities”. He said Mr McCarthy’s clients were “far from oppressed”.
In an affidavit, Patrick Ferriter said the four elements of their business are the sale of new and second-hand DAF trucks, servicing the truck, truck hire and the sale of spare DAF parts.
While DAF Cork does not have a written dealership agreement with the Netherlands parent, Daft Trucks NV, it has a “de facto agreement” to do so which it had developed over the last 35 years, he said.
In 2019, DAF Netherlands conducted a review of the Irish market and, as a result, DAF Netherlands and DDI adopted the position that DAF Cork would have to cease selling new DAF trucks with only DDI allowed to sell in Ireland, he said.
Mr Ferriter said DAF Cork has not breached its dealer agreement with DAF Netherlands and no steps have been taken to end that relationship. He said a proposal was made that the Ferriters would receive 34 per cent of net profits from sales from DDI for two years in circumstances where the entire profit would have previously gone to Cork.
The Ferriters rejected the proposal saying it meant they would get a payment of €140,000 for their 34 per cent shareholding, which has a value of some €8 million, which would be reviewed after two years. Offers of mediation to resolve the dispute were not successful, Mr Ferriter said.
He claimed that without any lawful authority, the respondent companies had negotiated with DAF Netherlands and excluded DAF Cork from those negotiations.
Following those negotiations, he said, the respondents presented a “fait accompli” whereby DAF Cork was required to stop selling trucks in its own right and simply be an agent of DDI.
The Ferriters seek an order directing that the respondents be compelled to buy out their shares at a price to be determined by the court.
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