With just weeks to go before this year’s international festival kicks off in Co Kerry, details of the "irretrievable breakdown in relationships" were aired before Judge Miriam O’Regan.
The legal action has been taken by Richard Henggeler, 72, who owns the Rose Hotel, in Tralee, with his Killarney-born wife, Eibhlín Moriarty.
Their daughter, Dorothy "Dott" Moriarty Henggeler, representing Washington DC, was a popular contestant in the 2011 pageant, and is said to have loved her time with the other Roses. Two years later, while working in her dream job with Tourism Ireland New York, she was diagnosed with a brain tumour, and died in 2014, just before her 28th birthday.
Her parents decided to form a more permanent connection with Kerry, and bought the 165-bedroom Fels Point Hotel in the Co Kerry town from Nama, for €4 million, and renamed it the Rose Hotel. Mr Henggeler, who had sold his computer consultancy company for an undisclosed sum, also gave €800,000 to the festival company during 2014 and 2015.
The court has been told in legal filings that he now claims that €700,000 of that sum did not benefit the festival company and was instead paid out to shareholders. He claims this included €550,000, which he said was used by the company’s managing director, Anthony O’Gara, to pay off personal debts. Kerry Rose Festival Limited and its directors have not disputed that the money was disbursed to shareholders. They have said, however, that the money was not an investment in the company, but was used by Mr. Henggeler to buy 31% of its shares from existing shareholders.
Mr. Henggeler’s barrister told the court on Monday that this was an "acrimonious dispute."
He said there had been a "very significant fallout" between his client and Mr. O’Gara, 68, who has a 55% stake in the company, and the company’s other director, accountant John McCarthy, 55, who has a 6% stake.
Mr. Henggeler has sought a declaration from the court that he is an oppressed shareholder. He also wants a court orders compelling Mr. O’Gara and Mr. McCarthy to sell their shares to him.
In a sworn statement on behalf of the company and both of its directors, Mr. O’Gara has said that even though they did not believe Mr. Henggeler was entitled to the reliefs, he and Mr. McCarthy were willing to either sell their shares to him, acquire his shares, or for both sides to jointly sell their shares to a third party committed to ensuring the continuity of the festival.
Mr Henggeler’s barrister said: "They are prepared to dispose of their shareholding to the applicant, or buy the applicant’s shareholding. The difficulty we have is that there is outstanding information to allow us to carry out a proper valuation of the company."
He took the court through an exchange of recent correspondence from Mr Henggeler’s forensic accountants, Grant Thornton, who it was intended would carry out the valuation, and the respondents.
"There now seems to be acceptance that either I buy him [Mr McCarthy] out, or he buys me out, but there has been a volte-face, we say, on the part of the respondents in the last short period of time, because they are now saying that in relation to these proceedings the only information we are entitled to is information provided to shareholders [at the AGM]; we are not a director of the company," he said.
He said this was contrary to assurances given previously in correspondence. He said they had written asking for books and records for their forensic accountants, and documentary evidence of the offer, as well as full details of the terms of the offer. He said this had been refused. He said his client had ‘serious concerns’ about how the firm had been run over the past couple of years.
The respondents had complained on affidavit that Mr Henggeler’s sworn statement had been damaging to their reputation and the festival’s, he said. He said the whole tenor of the replying affidavit was that this was a not-for-profit company, run by the community for the benefit of the community. The court would have to rule on the true valuation of the company, he said.
Judge O’Regan will list the case for mention in November, to give the respondents time to file a further replying affidavit, before a date is set for a full hearing.
* This article was originally published on Extra.ie.
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