An action against Davy stockbrokers over allegedly negligently advising a businessman to sell investment bonds for around €5.58 million, which he claimed was a significant undervalue, has settled, the Commercial Court has heard.
Patrick Kearney and Kilmona Holdings Ltd brought proceedings against J&E Davy, trading as Davy, over advice allegedly given by the firm in 2014 concerning the sale of 27 million Anglo Irish Bank callable subordinated floating bonds.
The case was admitted to the Commercial Court list last October on consent between the parties.
Mr Justice John Hedigan was told on Monday by Andrew Fitzpatrick BL, for the plaintiffs, the matter had been settled and could be struck out. No details of the settlement were revealed.
In his action, Mr Kearney, Queensway Quay, Gibraltar, claimed he and a company, Pattan SI, were advanced a loan for €18.4 million by Anglo in 2009 to buy the bonds. Anglo's successor, IBRC, later assigned the benefit of the loans to Stapleford Finance Ltd.
Mr Kearney said he engaged LeBruin Private Ltd in 2014 to advise him on how to deal with his debt obligations to Stapleford.
Following discussions involving Mr Kearney, LeBruin and Tony O’Connor, who Mr Kearney alleged was an employee of Davy, it was decided Davy would sell the bonds for a price which would discharge the €2.36 million debt to Stapleford and leave a profit which would be divided between him, LeBruin and Davy.
The bonds were sold for 20.25 cent in the Euro, realising a total price of around €5.58 million.
On November 14th, 2014, the day of the sale, he met with an investment banker who told him he did not believe 20.25 cent was the true value of the bonds, Mr Kearney said. The banker later agreed to buy them for 26 cent, later rising to 32 cent, he claimed.
Mr Kearney claimed he was dissuaded by Davy and LeBruin from selling to that banker as he was already legally committed to selling.
Mr Kearney claimed the price represented by Davy was below their market value and also alleged Davy failed to disclose to him an alleged conflict between his financial interests and theirs.