Kavanagh brothers in legal battle after relationship sours
DEVELOPER Greg Kavanagh is being sued over the alleged removal of his brother as director of 19 companies.
Bernard Kavanagh, otherwise known as Hugh Kavanagh, was in an “unfortunate” and urgent commercial dispute, the High Court heard.
Relations between the brothers had deteriorated and the matter was urgent because Hugh learned last Thursday of his “clearly unlawful” removal as director of 19 companies, counsel Rossa Fanning said.
In broad terms, Greg Kavanagh was seen as the “front of house” of the business while Hugh Kavanagh had a hands-on role in terms of building and development activity, Mr Fanning said.
He was not bringing these proceedings lightly and believed he had been left with “no other option”, Mr Kavanagh said.
The break-up of his relationship with his brother has caused “immense personal grief and distress”, he said.
“We started out together in 2004 and from then on had shared everything. There was never a need to formally document our agreement, it was simply entirely natural. He always had my back and I always had his.”
Hugh Kavanagh estimated the net value of Structured Marshalled Investments Ltd (SMIL), the main holding company for the business, was some €35m.
Ms Justice Deirdre Murphy agreed the matter was urgent, gave counsel leave to serve short notice of the proceedings on the defendants and returned the matter to Friday.
The proceedings are by Hugh Kavanagh and Simlur Ltd, a company of which Hugh Kavanagh is owner and sole director, against Greg Kavanagh and 20 companies, including SMIL, New Generation Homes Ltd and Isotonic Hotel Ltd.
Hugh Kavanagh claims he has been removed as a director of 19 of the 20 defendant companies but not of one firm, Bezzu Corporation Ltd.
In court documents, he said he had operated with Greg, his younger brother, for some 17 years and they had worked closely together to build up a very successful business.
Up until about six weeks ago, they had had a very close personal relationship as brothers, each were best man at the other’s wedding and Greg was godfather to two of his three children, Mr Kavanagh said.
He said important decisions were made jointly and it was always agreed they owned the business equally. He said this was formalised in 2018 when 50pc of the shares in SMIL, the main holding company, were transferred to the plaintiff ’s holding company, Simlur.
In recent months, his relationship with Greg has deteriorated, he said – adding that Greg asserted Hugh has no ownership interest in SMIL or other group companies.
In the circumstances, he said he had no alternative except to bring proceedings in which he would be seeking various injunctions, pending trial, preventing his removal as a director of the companies, permitting him to continue to participate in managing the business, and ensuring the value of his stake is not diluted.