Citadel Corporate Finance claims it is entitled to 25% share of profits for work on Bailey’s Kildare property

A company that acted as trustee for a discretionary trust involved in the development of a €40 million land bank in Kildare for builder Tom Bailey’s family claims it is entitled to a 25 per cent share of profits for its work on the property.

Citadel Corporate Finance Ltd, which provides services to small businesses, high net worth individuals and family offices, is seeking a declaration from the Commercial Court that it has a binding contract for the 25 per cent share which it says was agreed at a meeting with Mr Bailey at a meeting in the InterContinental Hotel, Ballsbridge, Dublin, in December 2021.

Citadel’s proceedings follow a case admitted last month to the commercial list in which Mr Bailey claimed Citadel had engaged in a “blatant attempt at a shakedown”.

On Monday Mr Justice Denis McDonald admitted Citadel’s case against Mr Bailey to the commercial list after the firm argued both cases should be heard together or consecutively to save on scarce judicial resources.

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Mr Bailey and his brother Michael, who set up Bovale Developments, figured centrally in the 1990s planning tribunal although adverse findings against them were later removed from the tribunal’s report. They were also disqualified from acting as company directors for seven years in 2013 over their management of Bovale.

In 2020 Tom Bailey set up the Culcommon Trust whose main beneficiaries were his wife Caroline Bailey and their two children Ellen and Jeff. One of the two trustees was Citadel.

Citadel’s sole director, Ronan Barrett, in an affidavit seeking admission of the Citadel proceedings, said he was also a director of two companies, Moygaddy Holdings and Moygaddy Property, which along with a firm owned by the estate of the late Oliver Murphy, owned 250 acres at Moygaddy, Maynooth, that is earmarked for major development and estimated to be worth €40 million.

He said the Moygaddy lands were originally to have been acquired by the Glenvela Partnership, comprising Utmost PanEurope DAC and Glenvela Jersey, which in 2015 had purchased various assets previously owned by the Bailey brothers. Those assets had gone into Nama following the economic crash and Nama had consented to sell them to Glenvela.

In 2016, Glenvela Jersey retained Citadel to secure the acquisition and development of a 34-acre site at Braganstown in Kilcock, Co Meath, for €7.6 million, which eventually yielded a €17 million profit for Glenvela Partnership. Mr Barrett said Tom Bailey later acknowledged that that project would not have succeeded without Citadel’s involvement.

He said he told Mr Bailey then that if they were ever to work again on a similar transaction he would seek equity participation rather than a transaction fee as had occurred with the Kilcock development.

Mr Bailey, he said, then identified the Moygaddy, Maynooth, lands for potential development. These were originally to be acquired by Glenvela but, in order to comply with pension cap restrictions and enable the Bailey family benefit in a tax efficient manner, the Culcommon Trust was established by the Glenvela Partnership to acquire the lands.

Mr Barrett said Mr Bailey told him he wanted Citadel involved in developing the lands. Mr Barrett sought equity participation but following discussions with Mr Bailey about winding down Citadel’s involvement he said Mr Bailey then refused to constructively engage on the question of fees.

However, on December 12th, 2021, in the InterContinental, he said he had a face-to-face meeting with Mr Bailey where it was agreed to resolve the differences to advance the Moygaddy lands project on the basis that Citadel was entitled of a 25 per cent equity stake or profit share. He said it was not recorded in writing but it was part-performed by Citadel because it continued to provide services to Mr Bailey for the development.

It was not apparent Mr Bailey intended to resile from that agreement until December last and despite efforts to resolve the dispute this had proven not to be the case.

In its action Citadel also seeks an order for specific performance of the agreement or damages for breach of contract. It further seeks, or as an alternative, an order for payment of reasonable remuneration for the work it has carried out on Moygaddy.