Farmer co-operative wins wind farm dividend case
A farmer co-operative which had invested €1.2 million in a wind farm company uis entitled to be paid dividends, a court has ruled
A farmer co-operative which invested €1.2 million in a wind farm company is entitled to be paid arrears of dividends over a three-year period, the High Court has ruled. The precise sum will be decided later.
The Clonakilty-based co-operative had claimed it was entitled to some €504,000 in dividend arrears but that was opposed by Tralee-based Muingnaminnane Windfarms Ltd (MWL), which argued it had insufficient profits and therefore could not lawfully pay dividends.
The president of the High Court, Mr Justice Nicholas Kearns, found there would have been sufficient reserves to pay dividends had the promoters not deducted rental payments to themselves for the wind farm lands, which they own, from the MWL profits.
A collateral agreement between the sides clearly required the promoters not to make such deductions where that would affect dividend payments, he ruled. He will hear arguments later on the dividends to be paid after hearing submissions concerning profit figures.
Lisavaird Sales Ltd and Lisavaird Marketing Ltd, which operate the co-operative, had sued MWL arising from the Lisavaird companies’ investment in the Muingnaminnane windfarm near Tralee, Co Kerry.
While rejecting claims that “a special contract” between the parties required payment of the dividend, Mr Justice Kearns found a collateral contract was made whereby the promoters represented to Lisavaird that rent payments would be subordinate to dividends payable to Lisavaird under the share subscription agreement.
In his judgment, Mr Justice Kearns noted MWL was owned by Mike Barry, Dr Aidan Forde and Dr John Bourke, who also owned the lands on which the wind farm was sited.
Terms of an email from Dr Forde to Lisavaird in August 2007 to that effect were clear and unambiguous, he said.
In 2007, the Lisavaird companies were approached by Dr Forde about providing mezzanine financing of €1.2 million to MWl for a five-year period at a fixed annual return of 9 per cent.
The wind farm proceeded and a dividend was declared and distributed in 2008 and 2009 but none was declared or paid in 2010, 2011 and 2012, because MWL said there were no profits out of which a dividend could lawfully be paid in those years.