Court refuses to order return of $8m shares in architecture firm to family trust

Architect Jeremiah Ryan claimed he agreed ‘caretaker arrangement’ for shares

Mr Justice McDonald said he did not find credible the evidence of either Mr Ryan, who was also principal of the architects firm HKR Dublin, or Winthrop Engineering firm founder, Barry English

Mr Justice McDonald said he did not find credible the evidence of either Mr Ryan, who was also principal of the architects firm HKR Dublin, or Winthrop Engineering firm founder, Barry English

 

An architect and an engineer agreed a scheme to move shares in a firm worth $8 million (€7.1 million) when the architect got into financial trouble and later filed for bankruptcy, the High Court has heard.

In his judgment on proceedings brought following a dispute over the scheme, Mr Justice Denis McDonald dismissed most of a case brought against Winthrop Engineering firm founder, Barry English.

The case was brought by Dublin architect, Jeremiah Ryan, acting as trustee of the shares in his Abu Dhabi firm Horan Keogan Ryan Middle East (HKRME), and by the firm itself. It was also brought by Patrick Stafford, another trustee of the trust involved, the Ryan Family Trust (RFT).

Mr Justice McDonald said he did not find credible the evidence of either Mr Ryan, who was also principal of the architects firm HKR Dublin, or of Mr English. He made his comments when refusing to order the return of the $8 million, which Mr Ryan claimed was held in a caretaker arrangement by Mr English for the trust set up for Mr Ryan’s children, the RFT.

Mr English said there was no such caretaker arrangement and claimed he agreed to buy the shares at a time when Mr Ryan was facing bankruptcy and to sell them back to him after he exited bankruptcy “at market value”.

The sum agreed between the two men for the company was just €100,000 but after Mr Ryan entered his UK bankruptcy, some $8 million was transferred from HKRME to a Guernsey bank account.

That account was held by a British Virgin Islands-registered firm called Sunvit, which was controlled by another trust established for the benefit of Mr English’s family.

HKRME was primarily established in the hope of winning a large project, the Abu Dhabi Plaza, in Astana, capital of Kazakhstan and it won that contract in 2010 for fees of $41 million.

Mr Justice McDonald said the claim by Mr Ryan and Mr Stafford as trustees of the RFT must be dismissed as he was satisfied that trust did not have any beneficial interest in the shares of HKRME.

He found the true nature of the agreement between Mr Ryan and Mr English was that Mr English would act as caretaker of the shares on Mr Ryan’s behalf, but not as caretaker on behalf of the family trust.

As Mr Ryan had made no personal claim in the proceedings, this finding was of no benefit to Mr Ryan, he said.

HKRME could also not succeed on the basis of the two men’s agreement, he held.

Board meeting

Earlier, Mr Justice McDonald found Mr Ryan lied to a board meeting of HKR Dublin in March 2011 when he told fellow directors that HKRME’s shares were held in trust for HKR Dublin.

He said Mr Ryan “consciously and deliberately told lies” to representatives of the trustee handling his bankruptcy in the UK about the sale of HKRME. Mr Ryan told the representatives Mr English “purchased the business in Abu Dhabi . . . with a full valuation and good luck to him”.

The judge also expressed serious concerns about the evidence of Mr English. It was clear very substantial payments were to be paid to the Sunvit, Guernsey, company “in return for fictitious introductions by Mr English to sources of work for HKRME. It was simply an arrangement whereby extremely large sums could be extracted from HKRME and transferred offshore.

“The fact that Mr English agreed to be party to such bogus arrangements raises a very serious issue in relation to his probity”, the judge said.

Mr English, he said, was also involved in the “sham termination” of Mr Ryan’s involvement in HKRME. He generated a fictitious invoice to create a paper trail on the sale of the shares and also backdated the agreement to acquire the shares.