Liquidator of MMI may shortly seek court permission to sue debtor clients

An application by the official liquidator of Money Markets International Ltd for permission to sue clients who owe the company money is "imminent" before the High Court, counsel for the liquidator said yesterday.

Mr John Gleeson also told Ms Justice Laffoy that one million shares in Dana Petroleum had been sold by the liquidator, Mr Tom Kavanagh.

Those shares were in the name of Mr Hillary Fanning, alleged to be an uncle of Mr Oisin Fanning, one of the seven directors of MMI who are being sued by the liquidator. Mr Kavanagh alleges that MMI directors misappropriated £1.9 million from the company and he is suing them for fraudulent conversion and breach of fiduciary duty. The claims have been denied.

At an earlier court hearing, Ms Justice Laffoy was told that solicitors acting on behalf of Mr Hillary Fanning denied he was a client of MMI and alleged that his signature appeared to have been forged on documents which rela ted to the purchase of almost one million Dana shares.

Yesterday, when the judge asked about the position in relation to Mr Hillary Fanning, she was told by Mr Gleeson that the shares which appeared to have been the property of Mr Fanning had been sold.

Ms Justice Laffoy said the examiner of the High Court had brought to her attention a newspaper report in relation to the matter.

Mr Gleeson said he had seen the report but, not only had he no instructions regarding the report, he did not know on what basis the statements in it had been made or by whom. "I think there is enough complexity in this liquidation without the official liquidator having to make inquiries about reports that appear from unnamed sources," he added.

At an earlier hearing, Ms Justice Laffoy gave permission to the liquidator to contact MMI clients who had paid fully for shares which were held by an MMI nominee company. Those same clients were also debtors of MMI and owed monies to the company for earlier share transactions for which they had not paid.

Yesterday, Mr Gleeson said that in relation to the sale of the shares, the judge had given the liquidator liberty to notify all of the debtors of the company who held shares that, if they wished to object to the shares being sold, they should say so.

One person had agreed to have his shares sold. Ms Justice Laffoy said the liquidator should contact four clients for a second time. In relation to the remainder who refused to have the shares sold, Mr Gleeson said the liquidator planned to bring proceedings against these persons.

An application would be brought imminently before the court seeking to give the liquidator permission to bring proceedings against all of the debtors of MMI for liquidated sums and these proceedings would include the clients who refused to allow shares to be sold.

Once the proceedings were issued against those clients, the liquidator believed he would be met by counterclaims because many had said they were seeking damages on the basis of alleged negligence of the directors and because they claimed the share transactions were unauthorised.