Burlington Plaza shareholders in High Court over proposed sale of stake

Injunction sought to appoint mutually agreeable third party to manage process

 Burlington Plaza, Burlington Road, Dublin: Coolbrook Developments  has brought proceedings over plans by fellow shareholder Percy Nominees  to sell its   share in the building.  Photograph: Matt Kavanagh/The Irish Times

Burlington Plaza, Burlington Road, Dublin: Coolbrook Developments has brought proceedings over plans by fellow shareholder Percy Nominees to sell its share in the building. Photograph: Matt Kavanagh/The Irish Times

 

A fresh dispute over the proposed sale of an interest in the Burlington Plaza office block in Dublin has come before the High Court.

Coolbrook Developments, owner of 50 per cent of the property on Burlington Road, has brought proceedings over plans by fellow shareholder Percy Nominees Ltd to sell its 25 per cent share in the building.

It had sought orders including injunctions directing Percy to appoint a mutually agreeable third party to manage the sales process and receive bids before any sale of its interest.

Coolbrook, represented by John O’Donnell SC and Jarlath Ryan, told the High Court on Thursday its action arises out of the proposed sale by another shareholder, Lington Development Ltd, of its 25 per cent share in the property to Davy Target Investments.

Coolbrook is unhappy over how the sales process was conducted and claims Davy, or one of the Davy group of companies, provides services, including management services, to Percy and Lington, the court heard.

Davy, Coolbrook claims, initiated the sales process of Lington’s interests.

Coolbrook claims the sale also breached the terms of an agreement entered into by the co-owners, including a term requiring any buyer of the co-owners interest must be at arms length from the seller.

Coolbrook claims Davy, or any of its corporate subsidiaries, is not an arms length party.

Temporary injunctions

Earlier this month, Coolbrook did not proceed with its application for temporary injunctions preventing sale of the property and restraining Lington taking any further action in the transaction after the court heard the sale of Lington’s interest had closed before the injunctions application was made.

On Thursday, Mr O’Donnell said Coolbrook fears that what happened in relation to the purported sale of Lington’s interest will be repeated. “All we want is a level playing field in relation to a bidding process,” he said.

Lawyers for Percy rejected Coolbrook’s claims and said there was “no evidence before the court” to support its allegations in relation to the sales process.

Aidan Redmond SC, for Percy, said the appointment of any “referee” would damage his client’s reputation but Percy was prepared to include any bid for Percy’s interest on the court file.

That offer was accepted by Coolbrook.

On that basis, Mr Justice Paul Gilligan agreed to strike out the injunctions application brought against Percy. He also made orders allowing Coolbrook re-enter the proceedings on 24 hours notice to the defendants.

Third action

The third action concerning the Burlington Plaza is by Lington against financial fund Dengrove DAC.

In those separate proceedings, due to be mentioned at the Commercial Court next week, Lington got a temporary injunction preventing Dengrove enforcing its security by appointing a receiver over its interest in Burlington Plaza.

Lington assigned its interest in the property to AIB in 2007. That interest was later taken over by the National Assets Management Agency (Nama) and sold on to Dengrove.

Earlier this year, Dengrove claimed Lington had defaulted on its obligations, demanded full repayment of what was due and owing and threatened to appoint a receiver over Lington’s interest.

Following the purported sale of Lington’s interest in the Burlington Plaza, the court heard fund had been transferred to Dengrove to pay off what was owed but a dispute remains over interest allegedly outstanding to Dengrove.