GOLDEN Vale and its dismissed chief executive, Mr Jim O'Mahony, may be heading for a costly legal battle over Mr O'Mahony's compensation package after a planned meeting of the co-op board today was cancelled last night.
It is understood that Mr O'Mahony has rejected a compensation offer from the board of Golden Vale plc which, in turn, has rejected a compensation claim from its former chief executive. Efforts here continuing last night to find a solution but sources were not confident that agreement could be reached ahead of a meeting of the plc board in Charleville, Co Cork today.
Sources said that Mr O'Mahony was pressing for a package that reflected not only compensation for loss of his £300,000 a year chief executive's job, but also compensation for the alleged damage to his reputation caused by the manner of his dismissal last week.
Golden Vale plc is understood to be thinking in terms of a simple package, compensating for loss of office.
Given the size of Mr O'Mahony's salary, bonus and pension package lit is thought likely that he is pressing for compensation well in excess of £500,000, while the plc has offered a substantially smaller figure. Informed sources said last night that the two parties were still are apart, but did not exclude agreement being reached before today's plc board meeting at 2 p.m. in Charleville.
Failure to reach agreement with Mr O'Mahony could have serious implications for relations between the plc and the co-op.
Unlike some other agri-business, companies, such as Kerry, Avonmore and Waterford, Golden Vale Co-op does not have a stake in the plc, although the co-op's 4,500 shareholders do control over 60 per cent of the plc shares. Many of these shareholders, and a large group on the co-op's 76 strong board, believe Mr O'Mahony has been harshly treated and, at least, deserves a very substantial compensation package.
Meanwhile, sources close to Golden Vale have played down suggestions that the current difficulties may lead to early merger discussions with Dairygold.
Golden Vale pulled out of a three way merger with Mitchelstown and Ballyclough Co-op in the easily 1980s, `leading' the other two co-ops to merge and create Dairygold. Since that merger, Dairygold has been an outstanding success and its chief executive, Mr Denis Lucey, is thought to be well disposed to a new merger to create a Munster giant.
Trading in Golden Vale shares, which has been exceptionally heavy in recent weeks, eased on the Dublin market yesterday.
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