Former Irish rugby international Ronan O’Gara has claimed that his former business partner John O’Driscoll fraudulently removed €15,725 in funds from their Cork pub business.
Mr O’Gara, currently manager of the French rugby side La Rochelle, is challenging the personal insolvency arrangement of his friend and former UCC and Cork Constitution team-mate whom he backed in Cork pub, The Silly Goose, through the company Ezeon Entertainment Limited.
The former Munster rugby star is making the application through Ezeon as a shareholder of the company. He claims that he did not partake in Mr O’Driscoll’s personal insolvency arrangement and was not notified, only learning about the debt write-off from media reports.
He claims the normal proof of debt process was not followed and he would have insisted that the company oppose Mr O’Driscoll’s personal insolvency arrangement had he known about it.
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Referring to issues at Ezeon, Martin Hayden SC with Keith Farry BL instructed by Ogier Leman Solicitors, representing the firm, told Mr Justice Alexander Owens at a court hearing that there was “something rotten in the state of Denmark”.
He said that Ezeon was controlled by Mr O’Driscoll at the time the High Court approved his personal insolvency arrangement last July and that there had been a “fraudulent removal of funds and use of assets that were not accounted for” at the company.
Mr Hayden told the judge that a “very complex sequence of events had unfolded” and that the company’s accountant later discovered that “material non-disclosures” had taken place.
Mr Justice Owens said that the court would “take a serious view in relation to bankruptcy or anything like that if people were seriously misled”.
Mr O’Gara and Mr O’Driscoll were friends for many years before Mr O’Driscoll, who had managed pubs previously, raised the idea of opening a pub together in 2006. Mr O’Gara said he was brought in as “a name” to link to the pub for advertising and promotional reasons.
He told the court he was “barely” in the pub; he was in The Silly Goose between five and 10 times and attended events such as “Questions & Answers nights” before rugby events.
Cork property developer Michael O’Flynn became involved as the pub’s financial backer after being asked to become involved by Mr O’Gara.
He was personally friendly with Mr O’Driscoll due to family connections, their neighbouring properties and his providing work and income to his wider family.
The three men were equal partners in the pub.
Mr O’Gara and Mr O’Driscoll gave Mr O’Flynn a €2.2 million personal guarantee to cover Ezeon’s liabilities, a sum neither man could repay.
Mr O’Flynn has attempted to challenge Mr O’Driscoll’s personal insolvency arrangement in a number of previous bids before the courts.
Bernard Dunleavy SC, representing Mr O’Driscoll’s personal insolvency practitioner, told Mr Justice Owens that Mr O’Flynn “cannot be engaged in some kind of Lanigan’s Ball where he steps in and steps out again” by swearing different versions of what he is owed by the company.
Mr Dunleavy asked the judge to hear all Mr O’Flynn’s applications “corralled” at one hearing and to come before the court at the same time. The judge agreed with this approach.
Mr Hayden, in reply, disputed Mr Dunleavy’s characterisation that he was acting for Mr O’Flynn in this application. He accused Mr O’Driscoll of misleading the Insolvency Service of Ireland and for engaging in a “fundamental abuse of process.”
In an affidavit submitted to the judge, Mr O’Gara said he learned at a meeting in September 2020 while signing off on Ezeon’s 2019 financial statements that there was a deficit at the firm and that money was missing from the company.
He told the court that Mr O’Driscoll acknowledged to him that €15,725 was taken from the company “in breach of trust without approval and misappropriated from the company”.
The rugby star said Mr O’Driscoll undertook to repay the debt but never did.
Mr O’Driscoll was “therefore aware of and had admitted to the taking, theft or misappropriation of monies from the company,” Mr O’Gara has told the court.
The company’s debt was “a big issue” for him, he said, because he had contributed €20,000 in instalments to the company “to keep the business afloat” as it was “struggling financially.”
In his submission to the court, Mr O’Gara submitted an exchange of text messages with Mr O’Driscoll from March 2021 in which he asked his friend whether he had repaid the money.
“You have f**king fleeced me,” Mr O’Gara texted his business partner.
“Explain,” Mr O’Driscoll replied.
“You need to explain to me,” Mr O’Gara said.
“How did I fleece you?” replied Mr O’Driscoll.
“I put my own money into the company and you took it out… give it back to me,” he said.
The rugby star also claimed that he became aware from close friends that Mr O’Driscoll was having parties during the Covid-19 pandemic in the pub.
“I have a friend who owns a gym near the pub and he would see the debtor [Mr O’Driscoll] leaving the pub in the early hours of the morning in a very poor state,” he said.
With regards to the company’s indebtedness, Mr O’Gara said that Mr O’Flynn agreed in October 2020 that Mr O’Driscoll would pay one third of the debt owing to Mr O’Flynn, Mr O’Gara would pay one third and Mr O’Flynn “would take a hit on one third himself”.
In Mr O’Driscoll’s personal insolvency arrangement, his €950,000 outstanding debt was listed at a nominal value of €1 because, according to Mr O’Driscoll’s personal insolvency practitioner, Alan McGee, the property developer had not proved his debt, despite a request to do so.
In a new affidavit to the court, Mr O’Flynn told the judge he was “deeply upset” by Mr O’Driscoll’s actions as he had been “a loyal and supporting family friend for years.”
He claimed the insolvency process “has been abused in this case” and that this was “regrettably, a serious matter that needs to be addressed.”
“There is a material difference between a debt owing between friends, especially to a person who trusted and supported you, and a normal commercial bank who does not have any real engagement and has interest and profits built into their business to cover the risk of non-payment,” he said.
He told the court he felt that the forbearance and “ease” shown by him to help Mr O’Driscoll “has been thrown in my face.”
In July Mr Justice Owens rejected Mr O’Flynn’s attempt to object to the personal insolvency arrangement and has sought leave from the Supreme Court to appeal this decision.
On Monday, the judge adjourned the matter to January 16th to allow Mr Dunleavy submit replying affidavits on behalf of Mr O’Driscoll.
