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A dispute involving family members over the running of a company that owns well-known hotels in Dublin and Galway has been admitted to the list of fast-track commercial courts.
Mary Flannery claims that her two brothers, sister-in-law, and an accountant have acted oppressively, infringing on her rights with respect to the operation of Foxfield Inns Designated Activity Company.
She claims that her fellow shareholders and directors, as well as her auditor and accountant, have denied her answers to her questions about company affairs, which is oppressive to her interests in the company.
The claims are denied.
In addition to the Ashling Hotel in Dublin and the Imperial Hotel in Galway, Foxfield has acquired commercial and residential properties for rent.
One of the company’s subsidiaries owns and operates the Eglington Hotel at Salthill in Galway, which is used as a direct supply center.
Ms. Flannery, College Road, Galway, sued Frank Flannery of Ladyswell Park, Glasson, Athlone, Co Westmeath, and Kevin Flannery and his wife Sheelagh Flannery of The Green, College Road, Galway.
The court heard that Kevin, Frank and Mary Flannery are equal shareholders and directors of Foxfield. Sheelagh Flannery, is a director but not a shareholder.
Mary Flannery also sued James Norton, the company’s auditor and accountant, and Foxfield Inns DAC, both of Carysfort Avenue, Blackrock, Dublin.
In an affidavit, he said Norton, who was appointed personal representative of his late brother and Colin Flannery, has “great power” over the other defendants who are allegedly acting on Norton’s orders.
He claims that Norton acts as a “shadow director” of the company and “exercises much greater influence and control over its affairs” than he should.
He denies all allegations of wrongdoing made against him.
Andrena Moynihan, sister of Mary Flannery and also a shareholder and director of the company, seeks to be added as part of the action. The court heard that there are no complaints against him.
Mary Flannery, who is also the company’s secretary, said in her statement that she had been managing the company for 16 years and had helped the general manager run the Ashling Hotel in Dublin for about 25 years.
He said he has many concerns about company affairs, including the fact that Foxfield is making substantial payments to company members and the “corporate governance” fees allegedly paid to Mr. Norton.
It said it believes that certain payments made to Mr. Norton, allegedly in addition to the normal accounting fees and audit fees he normally receives, are “inappropriate and amount to a misapplication of company money.”
He is also concerned about Foxfield’s decision, following the resignation of the Ashling Hotel’s general manager, to appoint an outside firm to manage that hotel.
He has also raised questions about the company’s banking arrangements and what he believes are unusual lodgings and withdrawals from the company’s bank accounts.
She was also concerned about what she claims are various alleged unexplained irregularities and transactions, including the alleged failure to account for rental income that she claims is owed to the company.
He said that he was not given an adequate explanation about the purchase, with the money from the company and the subsequent sale of an apartment in New York.
It is also concerned about the rentals the company received from commercial units in Galway, which it said were bought not by Foxfield, but by an entity called AutoExec, whose directors are Kevin and Sheelagh Flannery.
She states that she and her advisers have sought information about these and other concerns that she raised.
The defendants alleged that the failure to explain these matters, he said, had resulted in all trust between the parties being irretrievably broken.
Mary Flannery added that she has effectively been sidelined from all major business-related decisions and has been blocked from inspecting the company’s books and records.
She says the alleged actions of the defendants amount to acts of oppression against her as a shareholder.
In his process, initiated under section 212 of the Companies Act 2014, he requests several court orders, including one ordering a shareholder to buy the other shareholder’s shares in the company.
He also asks for orders to regulate the affairs of the firm going forward, the payment of compensation and, alternatively, that the court appoint a liquidator for the firm.
The dispute was admitted to the fast-track commercial court list, following a request by Lyndon MacCann SC for Mary Flannery, filed by Judge David Barniville this week.
There were no objections to admitting the case on the list.
Postponing the case to a date in January, the judge said Andrena Moynihan’s request to become part of the action will be considered at a later date.
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