CFO in High Court bid to prevent dissipation of event company’s reserves

The chief financial officer of a Dublin-based international events agency intends to seek High Court orders to prevent dissipation of the company’s reserves before he is paid €654,000 allegedly due under share allocation and other entitlements.

Sean Hogan, chief financial officer of events and conferences agency Cogs and Marvel, wants to bring injunction proceedings against Cogs and Marvel Holdings, Cogs and Marvel (Europe) and against senior executives Killian Whelan, Róisín Callaghan and chief executive David Smyth.

The events organised by Cogs and Marvel, which employs 45 people in Ireland and has applied for Covid-19 Government wage support for its workers, have “all but ceased” due to the crisis, Rossa Fanning SC for Mr Hogan, told the court.

Mr Fanning made an ex-parte (one side only represented) application to Mr Justice Senan Allen on Wednesday seeking leave to serve the proceedings at short notice. The judge ruled the matter was not sufficiently urgent for short service and should proceed on the basis of normal notice to the defendants.

Redundant

Mr Fanning said, while his client had been made redundant on Tuesday night, he was not seeking an employment injunction but merely seeking to preserve the company’s finances until the dispute over his contractual entitlements is dealt with by the court. This was in circumstances where, in the last three weeks the company’s balance sheet, which stood at €10 million at the beginning of March, had been reduced by €6 million, counsel said.

Mr Hogan, a chartered accountant who says he was headhunted in 2017 by the company on promises including a 2.5 per cent share allocation, believes Cogs and Marvel has embarked on a concerted process of dissipating its financial reserves.

In an affidavit, Mr Hogan said he believes this is calculated to frustrate any prospect of him getting agreed entitlements following his departure, irrespective of the outcome of these proceedings. He is also concerned the business may be wound down and placed in liquidation. He says he has been in dispute with the company since 2018 about his share allocation and despite certain agreements in relation to other payments, the dispute remains.

Along with the 2.5 per cent shareholding, he has other entitlements including a bonus and statutory redundancy which come to €654,000, he claims. In the last week, the court heard, he was offered €150,000.

The company’s solicitors have written to Mr Hogan to say it has more than €5 million in reserves which is more than adequate to ensure its long-term viability. Mr Hogan says this was in the context of the firm seeking Covid-19 Government support for wages and where he had been told as recently as last Friday the business was at risk.

In the circumstances, he was seeking a number of orders including restraining the defendants dissipating the company assets and taking any steps to dissolve it.