O’Flynn group claims former staff made €12.5m at its expense
High Court told Patrick Cox used confidential data to build city centre student block
Several O’Flynn group companies are suing former employees Patrick Cox, Liam Foley and Eoghan Kearney for using information taken from the business to develop their own projects.
Victoria Hall Management Ltd, O’Flynn Capital Partners, O’Flynn Construction and other companies in the Michael O’Flynn-led group are suing former employees, Mr Cox, Liam Foley and Eoghan Kearney, along with Foley Project Management Ltd, Rockford Advisors Ltd, Carrowmore Property and others.
The O’Flynn group claims the defendants earned €12.5 million profit at its expense by using information taken from the business to develop their own projects.
Paul Sreenan, O’Flynn’s senior counsel, told the High Court that Mr Cox left the group, where he was investment manager, in August 2015. Shortly after giving notice in May, he downloaded 36,677 files from the group to an external server.
The O’Flynn companies claim that Mr Cox and the others obtained confidential information from the businesses and used it in the development of a 500-apartment student accommodation block on Gardiner Street, Dublin, which generated the €12.5 million profit.
The group maintains that Mr Cox was obliged to bring this project to the group and not to develop it, along with the other defendants, for personal gain.
Mr Sreenan said that, by December 2015, Mr Cox, Mr Foley and Mr Kearney had “reached agreement on the terms of a profit share for Gardiner Street”.
The group maintains it employed Mr Cox specifically to identify and develop opportunities such as Gardiner Street. Mr Sreenan noted that, at the time, the defendant was “well-aware” of the group’s appetite for such opportunities.
The O’Flynn group maintains that Mr Cox became aware of the Gardiner Street site, and the opportunity to build student apartments there in March 2014, through architect John Fleming, who had previous dealings with the defendant’s employer.
By May 2014, Mr Cox was in talks with the vendor, Peter Mullins, and solicitors Matheson, which he engaged. He subsequently bought the site. “He had this development in his hands and was nurturing it for himself, not for his employer, and that was a breach of his duties,” Mr Sreenan said.
The lawyer argued that Mr Cox owed the group as a whole duties of fidelity and loyalty while his contract barred him from using confidential information belonging to any part of the O’Flynn organisation.
Although O’Flynn’s UK arm, Tiger Developments, originally employed the defendant, he worked for the entire organisation, the group says.
Tiger subsequently transferred to Carbon Finance, part of US investor Blackstone, as part of a legal settlement with the O’Flynn group.
Mr Sreenan pointed out that company literature and Mr Cox’s own CV showed that he worked “across the entire group” and not just for certain elements of it.
The group wants compensation for the €12.5 million profit and damages in a case likely to involve the State’s National Asset Management Agency (Nama).
Mr Cox and the other defendants deny the claims. As part of his defence, Mr Cox will rely on a letter signed by Mr Nesbitt allowing him to pursue property projects in Dublin.
It emerged the defendants claim that, in 2012, while Nama had control of the O’Flynn group loans, one of the plaintiff companies, Grey Willow, made a profit without the State agency’s knowledge.
That arose from the sale of sites in Birmingham and Coventry in the UK by the O’Flynn group at Nama’s behest.
However, Mr Sreenan told the court the group received a letter from Nama stating it was satisfied with the entire process.