CEO threatens legal action against Hermitage Clinic over sack threat

Letter to board claims Larry Goodman has agreed to buy out developer Sean Mulryan, giving him majority control of group

In his legal letter, Eamonn Fitzgerald said he was approached by Larry Goodman (above) with a buyout offer that would allow him to afford ‘significant lifestyle changes’. File photograph: Eamonn Farrell/Photocall Ireland

In his legal letter, Eamonn Fitzgerald said he was approached by Larry Goodman (above) with a buyout offer that would allow him to afford ‘significant lifestyle changes’. File photograph: Eamonn Farrell/Photocall Ireland

 

The chief executive of a Dublin medical facility, the Hermitage Clinic, whose investors include businessmen Larry Goodman and Sean Mulryan, claims he has been threatened with the sack in a row that followed a failed attempt by Mr Goodman to buy his stake.

Solicitors for Eamonn Fitzgerald, who has run clinic since it opened in 2006, wrote to the board last week threatening legal action after he “learned through informal communications” that it planned to dismiss him.

Mr Fitzgerald also claimed in his legal letter that Mr Goodman, a 31 per cent shareholder, told him he had struck a deal to buy Mr Mulryan’s 31 per cent stake in the Hermitage, which would give him majority control of the business.

This agreement, he said, was part of a separate land deal in which Mr Goodman bought a nearby Georgian mansion, Fonthill House, that had for years been the corporate headquarters of Mr Mulryan’s Ballymore property group.

It is understood that, while a deal may have been agreed between the two wealthy businessman, Mr Mulryan has yet to formally sign over his shares in the Hermitage. Ballymore has, however, already moved out of Fonthill, and it is believed Mr Goodman is renovating the property.

Buyout offer

In his legal letter last week to the Hermitage board, Mr Fitzgerald, a 5 per cent shareholder, said he was approached last October by Mr Goodman, one of the wealthiest people in Irish business, with a buyout offer that would allow him to afford “significant lifestyle changes”.

Mr Fitzgerald said he declined the offer because he believed “shareholder value will continue to increase” under his leadership. He says Mr Goodman then told him he had struck a deal to take out Mr Mulryan’s stake.

“It is now clear that Mr Goodman is in a position to control Hermitage and its board through this arrangement entered into with Mr Mulryan,” wrote the chief executive’s lawyers.

Mr Fitzgerald complains he recently found out he was to be sacked, and that this would effectively deprive him of the full benefit of his shares because his automatic right to sell them back to the other shareholders at market value would lapse if he was dismissed.

Expensive litigation

In that event, there was a concern that he could be forced into expensive litigation.

“This is grossly oppressive to him as a shareholder,” his lawyers allege.

The clinic declined to comment on the contents of the letter, while Mr Mulryan, who remains a director of the Hermitage, declined to comment on the letter or whether he had agreed a deal with Mr Goodman.

Mr Goodman said the issues were “a matter for the board” of the clinic, where he is also a director. Mr Fitzgerald made no reply to requests for comment.

The Hermitage had revenues last year of almost €74 million, although it is heavily indebted. Mr Fitzgerald’s letter claims earnings in 2019 will be €11.4 million.

In addition to Mr Goodman and Mr Mulryan, backers also include developer John Flynn and medical consultant George Duffy.