Fruit distributor Fyffes and DCC have settled their marathon legal action by agreeing that DCC will pay a total €41 million compensation to Fyffes and various institutional investors.
The settlement follows the Supreme Court finding of unlawful insider dealing by DCC chief executive Jim Flavin in the sale of the DCC stake in Fyffes in early 2000.
Under the settlement, DCC is to pay a total of €41 million over the unlawful dealing. Most of that sum - €37.6 million - will be paid to Fyffes while the remaining €3.4 million will go to four parties representing institutional investors who lost out because of the sales.
The four are Eagle Star Insurance, Hibernian Insurance, Dreyfus Funds and Founders Asset Management.
The fact of the settlement means the Director of Corporate Enforcement will now have to consider whether to proceed with seeking disqualification orders arising from the case.
Disqualification orders, made under Section 160 of the Companies Act, restrain a person for a specified time from involvement in the management of any company on grounds of unfitness and the Director had asked the court, of its own volition, to consider making such orders in the case.
The Director did not identify those persons against whom orders should be made.
The court was also told last month by Mr Brian O'Moore SC, for the Director, that he believed the Supreme Court findings in the case meant disqualification orders could be made even if the case settled.
The settlement was announced to Mr Justice John MacMenamin just before 11am. He said that, given the development, the Director would have to be informed and would have to decide what course he would take.
The development means all existing court proceedings arising from the unlawful dealing have been settled and that the hearing of the claims for compensation, fixed for June 17th next and expected to last several weeks, will not now proceed.
All costs issues arising from the case, which ran for 87 days before the High Court, have also been settled.
The total legal costs are expected to be well in excess of €20 million, including Fyffes' legal costs amounting to €11.8 million.
The settlement was announced in a brief hearing yesterday morning by Mr Paul Sreenan SC, with Mr Brian Murray SC, for Fyffes. Mr Michael Cush SC represented DCC.
On the basis of the settlement, Mr Justice MacMenamim struck out the entire proceedings. Shortly after the settlement was announced, both companies issued a joint statement to the Stock Market outlining details of it.
The compensation hearing was to have been the final stage in the marathon legal battle between DCC and Fyffes which resulted in a Supreme Court decision last July that Mr Flavin engaged in unlawful insider dealing when he sold the DCC stake in Fyffes on three dates in February 2000.
Fyffes had argued it was entitled to some €85 million compensation over the share sales while DCC has insisted its aggregate liability is closer to €50 million. Some 20 per cent of institutional investors had also sued DCC over the share sales.
The Director, Mr Paul Appleby, has said in an affidavit he would be concerned "if any persons who actively participated in insider dealing transactions should be able to continue to discharge leading roles in Irish corporate affairs".