A DISPUTE between shareholders over the purchase of shares in a magazine publishing company led to proceedings beginning in the High Court in Dublin yesterday.
The company's publications include the Aer Lingus in flight magazine Cara, Old Moore's Almanac and the Irish Skipper.
Mr Donal McAuliffe and Ms Katrice McAuliffe, company directors, Palmerston Road, Rathmines, Dublin, have brought an action against the Lithographic Group Ltd, a printing company in Bray, Co Wicklow.
Proceedings have been taken against the McAuliffes by Mac Publishing Ltd of Taney Hall, Eglinton Terrace, Dundrum, Dublin. Until 1988, Mac Publishing was owned by Lithographic.
Mr Edmund Honohan, SC, for the McAuliffes, said a joint venture was established in 1988 in which the McAuliffes received 40 shares in Mac Publishing. The other 60 shares were held by Lithographic.
The publications of two companies owned by the McAuliffes were to be brought into Mac Publishing and the McAuliffes were to receive £35,000 and service contracts. The agreement provided that if either wanted to sell, the price was to be seven times the pre tax trading profits. In March, 1993 the McAuliffes served a notice to buy Lithographic shares.
Lithographic resisted notice on the basis that it had sent its own purchase notice some months previously.
Mr Honohan said that under the agreement his clients had no obligation to buy Lithographic's shares. Lithographic, on the other hand, had an obligation to buy from his clients.
The year ending March 1992 was invoked by the McAuliffes in their notice. His clients would be entitled to 40 per cent of £57,000 (a figure contained in the draft accounts) multiplied by seven.
There was a loss for the year ending March 1993. Therefore it had been crucial to get the notice in before the end of March that year.
Mr Honohan said the agreement gave Lithographic a first option for printing on behalf of Mac Publishing.
The court would be told of a "rumbling" dispute between the shareholders about printing charges, and of a letter sent by Mac Publishing to Lithographic stating Mac Publishing had received a better quote than Lithographic's.
This was the real reason the parties broke up.
Very considerably enhanced salaries were given to the McAuliffes on the basis that they would not attempt to place printing work in England. In November 1992 Mac Publishing placed a very small order with a competitor in Dublin, and the enhanced salaries were withdrawn. Mr McAuliffe issued the notice to purchase in March 1993.
Mr Honohan said his clients were suspended and dismissed and got bills from Mac Publishing for £120,000. They claimed they did not owe any money to the company and it was quite the reverse.
Mac, Publishing alleges Mr McAuliffe overdrew monies from the company for his own use, mismanaged the company's affairs and in breach of his duties as a director of Mac Publishing, sought to establish himself in direct competition.
The McAuliffes deny Mac Publishing's claims and counter claim for damages and breach of contract.