Solicitors acting for the liquidator of Money Markets International (MMI) Stockbrokers admitted yesterday in the High Court that they have received an "important letter", which has implications for an action for damages being brought by the liquidator against the MMI directors.

The admission contradicted a statement made on Wednesday by Mr Bill Shipsey SC on behalf of the liquidator, Mr Tom Kavanagh. He said his instructions were that no such letter had arrived at offices of the liquidator's solicitors on behalf of the Jersey company, Cater Allen, a subsidiary of Abbey National.

Mr Kavanagh alleges the MMI Stockbrokers' directors misappropriated more than £1.9 million (€2.4 million), which was said to have been in an account in Cater Allen.

Mr Justice O'Sullivan, having read a copy of the letter, adjourned further consideration until Monday. The letter was first mentioned on Wednesday during the hearing of proceedings brought on behalf of the liquidator, who is seeking answers to a list of questions submitted to the directors. During hearings last year, the court was told Mr Kavanagh had identified the Cater Allen company but not the beneficiaries of that account. The books and records of MMI Stockbrokers purported to show payments to Cater Allen but the persons shown to get credit were, in certain cases, Mr Oisin Fanning of Forenaughts House, Forenaughts, Naas, Co Kildare, Mr John Curran, another MMI director of Kingsley Mews, Raglan Road, Ballsbridge, Dublin and others associated with them. The court was told the liquidator believed £1.9 million had been misappropriated and he issued proceedings seeking damages from Mr Fanning; Mr Curran; Mr Paul Boucher of Sandford Road, Dublin; Mr Colm O'Reilly, Alexandra Terrace, Bray, Co Wicklow; Mr Tim Murphy, Dublin Road, Clane, Co Kildare; Mr Cian Kelly, Castldawson, Sion Hill, Blackrock, Co Dublin; and Mr Peter O'Byrne, Montpelier Parade, Monkstown, Co Dublin. The earlier court hearings were told Mr Kavanagh was concerned that Cater Allen was shown as having received an amount totalling £1.9 million and was a large debtor, but the Jersey company was denying it ever received that money and its response was that it intended to sue MMI Stockbrokers for the negligent operation of the discretionary account.

On Wednesday, Mr Mark Sanfey, for Mr Fanning, told the court that Cater Allen's solicitors had sent a letter to the liquidator. Mr Justice O'Sullivan said Mr Sanfey had claimed the letter indicated that Cater Allen was not making any complaint against MMI Stockbrokers and was not at a loss for the monies. Mr Shipsey said he was instructed no such letter had arrived at the offices of the firm of solicitors representing Mr Kavanagh and the matter was adjourned until yesterday.

When the hearing resumed yesterday, Mr John Gleeson, for Mr Kavanagh, said he accepted Mr Sanfey's account of the delivery of the letter was correct. The letter had in fact been received by Mr Kavanagh's solicitors on Tuesday morning but had not been located until Wednesday after the court had adjourned for the day. Mr Gleeson said that it was an important letter. He had no difficulty with Mr Justice O'Sullivan being given copies of it but he asked that the judge defer any consideration of the contents until Monday because he [Mr Gleeson] required an opportunity to discuss it with his senior counsel and with Mr Kavanagh.

He said the letter had implications for the action being taken by Mr Kavanagh against the MMI Stockbrokers' directors. The letter came as a surprise to his clients and they needed until Monday to deal with it.

Mr Justice O'Sullivan said he was open to Mr Gleeson's suggestion. Mr Sanfey said he was opposing Mr Gleeson's application for an adjournment. This was a very important letter which had implications for the way the rest of Mr Kavanagh's action would be conducted. He said Mr Justice O'Sullivan could not adjudicate on Mr Gleeson's application unless he considered the terms of the letter. In the interest of fairness, the letter should be opened to the court. Mr Sanfey said the liquidator had brought these proceedings in a blaze of publicity and had gone into court last October to apply for injunctions against the various directors without as much as pre-proceedings letters being sent to those directors. He asked that he be allowed to open the letter.

Mr Justice O'Sullivan, having read a copy of the letter, said he would adjourn the matter until Monday.