NIB and Purcell settle out of court

A legal dispute between National Irish Bank and a livestock exporting company, Purcell Brothers, over a £6.4 million (€8.1 million) debt incurred through foreign currency speculation, was resolved at the High Court yesterday.

The case - in which the trial judge had, in an unprecedented initiative and with the consent of both parties, appointed an independent assessor to assist in the analysis of complex foreign currency transactions and other matters - was expected to last at least four weeks and the courtroom was packed with financial documents and other material.

But the hearing never formally opened and talks between the sides began yesterday morning. A settlement was later announced to Mr Justice Kearns. No details were disclosed but Mr Michael Collins SC, with Mr Brian O'Moore SC and Mr Lyndon MacCann, for Purcell, said the deal was to the "satisfaction" of all. He said no order was required and asked that the matter be adjourned generally.

Mr Collins thanked the judge for the efficient management of the case, especially the selection of an independent assessor. Mr Paul Gallagher SC, with Mr John Gleeson, for NIB, expressed his client's gratitude for facilitating a prompt hearing which, counsel said, had greatly facilitated the result yesterday.

Mr Justice Kearns, who had earlier appointed the independent assessor, Mr Brian Brady, a former director of Ulster Bank Markets and now an independent financial consultant, was delighted the parties had resolved their differences.

He thanked Mr Brady for making himself available to the court for an initiative which, the judge said, he hoped would be repeated particularly if an assessor's presence helped facilitate settlements. Earlier, the judge said the assessor's role was to help him in understanding the meaning and effect of certain technical evidence.

The assessor would have no role in supplying evidence or in decision-making.

In earlier court hearings, Purcell had claimed NIB "facilitated and encouraged" unauthorised foreign currency speculation "in vast amounts" by Purcell's former managing director, Mr Gerry Purcell, which had left the company with a £6.4 million debt. It insisted it was not liable for the debt.

Mr Brian O'Moore SC, for Purcell, had claimed NIB gave Mr Gerry Purcell some £50 million credit, "directed us to the roulette wheel and then ran it". He argued Mr Gerry Purcell had engaged in currency speculation "behind the back of his family" and that the company's memorandum and articles of association, of which it claimed NIB was aware, did not permit currency speculation.

NIB claimed it was entitled to sue on foot of the debt and argued the foreign currency transactions engaged in by Mr Gerry Purcell were an integral part of the livestock company's business. It alleged Mr Purcell was an experienced businessman who "knew what he was doing" and said it was "disingenuous" for Mr Purcell to claim the transactions were not properly authorised.

It alleged Mr Purcell had substantial foreign currency transactions with other institutions and claimed Mr Purcell had told it the potential losses on those other transactions were some £3 million.

The bank also claimed the legal proceedings were a belated attempt to enable Purcell Brothers avoid its liabilities. It also suggested the company was seeking to avoid reaching a responsible agreement on the restructuring of those liabilities.

Mr Seamus Purcell, founder of Purcell Brothers and whose family have been involved in the meat business for some 50 years, was in court yesterday as were Mr Gerry Purcell and Mr Patrick Purcell. Mr Seamus Purcell has replaced Mr Gerry Purcell as managing director of the company, which employs 20 people.

Last October, Mr Justice Kearns granted Purcell's application to prevent NIB, pending the hearing of the full action, taking steps to enforce securities relating to the £6.4 million debt. But he instructed the company to sell 156 acres of farmland at Gracedieu on the outskirts of Waterford.

Purcell appealed the latter part of the judge's order to the Supreme Court. On November 17th, that court was told the appeal could be adjourned generally given NIB's undertaking not to seek the sale of the Gracedieu lands pending the outcome of the main action.