Mushroom business must pay €30.6m to buy out minority shareholders

The High Court has fixed €30.6 million as the price to be paid for the purchase of a minority shareholder’s interest in a mushroom business following claims of acts of oppression by majority holders.

Donegal Investment Group plc (DIG) claims it has been excluded from the affairs of Elst, in which it holds a minority shareholding. Elst is a holding company formed arising from a merger of Carbury Mushrooms and Monaghan Middlebrook Mushrooms Ltd.

DIG brought proceedings alleging oppression by the majority shareholders, including Danbywiske and Ronald Wilson, owner and controller of Danbywiske. The others who the case is against are the general partners of the Wilson Limited Partnership (shareholders either owned or associated with Mr Wilson or Danbywiske), Monaghan Mushrooms Ltd and Elst itself.

In its action, DIG alleges the Wilson shareholders are essentially running Elst “as if it were a family business” and are viewing board meetings as mere information sessions convened to explain decisions, including acquisitions and pay rises, which they have already taken and put into effect.

Chairman appointment

It is also claimed no independent chairman was appointed until 2012, five years after a commitment to do allegedly given by Danbywiske, and an alleged commitment to appoint two independent directors had not been honoured.

It is also alleged Danbywiske has no intention of taking steps to effect a sale of Elst despite an alleged agreement under a 2004 shareholders agreement the business would be realised within six years.

Last April, the High Court directed that a trial be held to determine the discrete issue as to what price the Wilson side might buy out DIG’s shares.

Yesterday, Mr Justice Brian McGovern set that price at €30.6 million after he heard expert evidence for both sides.