Move to terminate Maplewood contractor led to deadlock in dispute with investment firm
Posted on 13th April 2021 at 22:55
Director claims Broadhaven’s €16.2m investment in joint venture is in jeopardy
A move to terminate the involvement of a building contractor used by developer Michael Whelan’s Maplewood Homes on land in Ballycullen in south Dublin led to deadlock in a dispute with a firm which invested €16.2 million in a land acquisition joint venture, it has been claimed in Commercial Court proceedings.
Broadhaven Credit Investments DAC is suing Mr Whelan, a company called MW Homes which he is director of, and his co-Maplewood Homes director Alex Brett, along with a company called Oceanfield Ltd of which Broadhaven describes Mr Brett as being the “corporate representative”.
Oceanfield and MW Homes hold a 54.4 per cent shareholding in a company called Old Court Investments Ltd (OCIL), while Broadhaven owns 45.5 per cent.
OCIL acquires development sites in Old Court, Ballycullen, where Broadhaven says it invested €16.2 million in what was a joint venture with Maplewood to acquire adjacent sites.
Broadhaven, in proceedings admitted to the Commercial Court this week, wants orders declaring resolutions passed at two January extraordinary general meetings (egm) of OCIL to be invalid and unlawful.
It also wants orders restraining Mr Whelan, Mr Brett and their two companies, and OCIL itself, which is also a defendant, from putting those resolutions into effect.
Broadhaven director David Cullen said in an affidavit that one of those resolutions was the transfer of shares to MW Homes “in order to circumvent quorum requirements” for general meetings.
This was in circumstances where Mr Cullen had left the first January meeting rendering it inquorate and when no Broadhaven director attended a second reconvened egm, the share transfer to MW Homes took place, he said.
Mr Cullen said the dispute between Broadhaven and the Maplewood directors escalated in December when he (Cullen) unsuccessfully pushed for the termination of OCIL’s engagement with a building contractor of the Whelan family, Capami Ltd, which was involved in getting planning permission and developing the Old Court land.
Mr Cullen said the move to dismiss Capami was the result of its failure to get planning permission for development of the first phase of the Old Court lands, and Broadhaven believed a new contractor should be brought in.
However, he said, the fees obtained by Capami are the “central motivation” for Mr Whelan, Mr Brett and the two companies in driving decisions they make and not the best interests of OCIL.
Their fundamental, but mistaken, position is that the shareholders agreement favours the construction of houses on the land to the exclusion of other options including selling it off before construction, he said.
Mr Cullen also said another company owned by Mr Whelan and Mr Brett called Raven Dawn Ltd bought land from St Anne’s GAA Club in Bohernabreena in November 2018 without Broadhaven’s knowledge. This was contrary to the interests of OCIL, he said.
He said the Maplewood defendants “refused to countenance” joint development of the Old Court lands with Nama notwithstanding that it had the potential to be more profitable for OCIL. Nama took over lands which had been owned by Maplewood Developments, another Whelan family company which went into liquidation in 2012 after Nama appointed receivers.
Mr Cullen said in light of these alleged breaches of the shareholders’ agreement and OCIL’s constitution, Broadhaven’s substantial investment was in jeopardy. Matters had significantly escalated and come to a head in the last three months and required an expeditious hearing.
The case returns to the Commercial Court in two weeks.
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