A dispute between siblings in the family-owned Ward Cinema Group over the sale of €31.5 million in shares in the group has been resolved, the Commercial Court heard.
In 2019, Paul Ward was sued by his sisters Jean Kennedy, a company director, and Carol O’Riordan, a retired director. The Ward group runs the IMC cinema chain which includes the Savoy in Dublin and a number of multiplexes around the country.
Ms O’Riordan died in September 2021 and her part in the action had, before her death, been taken over by her husband Andrew O’Riordan under an enduring power of attorney.
In their action, it was claimed that in April 2019 the parties entered into a binding “heads of terms” agreement, whereby they would resolve their differences in relation to matters connected with various companies.
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The heads of terms provided, among other things, that Mr Ward would procure the acquisition of certain shares owned directly or indirectly by his sisters for a total of €31.5 million.
The first €25 million was to be payable by October 31st 2019, with the remainder payable in smaller tranches by October 2022.
The parties agreed to use their best endeavours to ensure all sums paid to the sisters would be structured in a tax-efficient way.
It was also agreed that if the money was not paid in accordance with the terms, that Mr Ward would consent to judgment for the outstanding balance.
The full €25 million tranche was not paid on time, though Mr Ward later lodged €12.5 million into Ms Kennedy’s bank account and €6 million to Ms O’Riordan’s account.
The sisters complained that Mr Ward had used cash reserves from the companies to make these payments which they said was not permitted under company law.
They also complained this represented “a significant risk” that they would have to pay income tax on a large portion of the money, rather than capital gains tax which, at 33 per cent, was considerably lower.
Mr Ward opposed their action.
The High Court, following a hearing in March 2022, granted summary judgment to each of the plaintiffs for €14.5 million against Mr Ward, which represented the €29 million that would have been due to be paid by March 2022 (with another €2.5 million payable in October 2022).
The court adjourned the issue of the dispute as to Mr Ward’s entitlement to a transfer of the shares.
Mr Ward appealed the summary judgment arguing, among other things, the heads of terms agreement was intended to create, and did create, reciprocal obligations so that the plaintiffs’ claim ought never to have been considered as apt for summary judgment.
Ms Kennedy and Ms O’Riordan opposed the appeal.
Last October the Court of Appeal overturned the decision and sent it back to the High Court for rehearing.
The rehearing was pending but on Friday Mr Justice Denis McDonald was told by John Lavell BL that it had been settled.
The judge struck out the case.
