O’Flynns seek damages from Blackstone over 'blitzkrieg'

Key people from US and British companies in the Blackstone global private equity fund group were involved in a "very elaborate and sophisticated, but ultimately hamfisted, blitzkrieg" against companies in the O'Flynn construction group, it has been claimed at the Commercial Court.

Developer brothers Michael and John O’Flynn and 82 companies in their group should be permitted to pursue claims for damages for conspiracy against the US parent company of the Blackstone group, as well as against two other Blackstone companies over an alleged “careful and sophisticated plan” to achieve control of four key companies in the O’Flynn group, Brian O’Moore SC said.

It was “incredible” to suggest the “coup” against the O’Flynns on July 29th last was carried out without the involvement of Blackstone’s parent company, he argued. The O’Flynn brothers alleged there was a “contrived” effort to create “an emergency” by calling in their personal loans at 10am on July 29th last and giving them two and a half hours to pay them.

While his side were unable to identify “who met who in the Four Seasons hotel on Park Avenue”, they could identify a number of people in Blackstone companies who were allegedly involved in the plan, counsel said. On those and other grounds, they should not be shut out from making the conspiracy case.

His side believed it had a "strong case" of conspiracy against the parent company in the group – US-based Blackstone Group International Partnership LLP - as well as London-based Blackstone Group LP and Irish-based Carbon Finance Ltd.

Mr O’Moore was opposing an application by Paul Gardiner SC, representing the three defendant companies, for orders striking out the claims of the O’Flynns seeking damages for alleged conspiracy against all three. Mr Gardiner also sought orders striking out claims for damages against the parent Blackstone company and the British company for allegedly causing loss by unlawful means.

There was no basis for the claim of conspiracy against any of his clients and no particulars had been advanced to support the claims, counsel said. What was going on here was a “trawl” by the O’Flynn side which had not met the evidential threshold to make a case of conspiracy, “still less prove it”.

The O’Flynn side had argued they had pleaded all they could at this stage but if that was all they had, there was no case. The O’Flynn side had failed to point to a single meeting with Blackstone after Carbon Finance acquired their loans from Nama last May and they could not rely on a claim they continued to receive emails from people in Blackstone post the loans acquisition.

Mr Gardiner also argued the Commercial Court has no jurisdiction to interpret five of eight facility agreements involving companies of the O’Flynn group and the National Assets Management Agency. While three of the eight facility agreements are governed by Irish law, the other five are subject to the jurisdiction of the English courts and the O’Flynn side was acting in breach of contract in seeking to have the Irish court construe those five, he said.

Having heard day long arguments from both sides, Mr Justice Brian McGovern reserved judgment.

On May 16th last, Carbon bought €1.8 billion loans tied to O’Flynn Construction from Nama and on July 29th secured High Court orders appointing an interim examiner to four key companies in the group. In August, the O’Flynns were put back in charge of their business after the High Court found non-disclosure by Carbon in bringing its application for interim examinership.

Ms Justice Mary Irvine made orders preventing Carbon enforcing either personal or corporate loans demands, stood down the receivers appointed by Carbon and restrained new directors appointed by Carbon to the O’Flynn companies acting as directors of any O’Flynn company.

The judge ruled the O’Flynns had raised serious issues to be tried and a full trial of those is due to open late next month.