The high-profile battle between Web Summit’s three embittered shareholders had been expected to feature heavy artillery exchanges in the High Court battle. In the end, we got little more than an exchange of small arms fire and a glimpse at the parties’ battle plans. A week of that was enough for the three already wealthy principal shareholders in the tech conference company – two of whom have potentially walked away tens of millions of euro richer than they were before it started – to get back to the negotiating table and hammer out a fragile peace.
Whether Mr Justice Michael Twomey’s words earlier in the week provided them with the impetus to settle the matter is unclear. Bluntly, he warned the parties on Tuesday morning that the legal process could stretch into 2028, assuming his eventual judgment in the case was appealed.
He strongly urged the three former friends and business associates to find common ground to avoid a protracted engagement that promised to be both personally and financially taxing for all involved.
“I was never ruined but twice,” Mr Justice Twomey said, quoting French Enlightenment writer Voltaire. “Once when I lost a lawsuit, and once when I won one.”
It was probably a coincidence that Paddy Cosgrave on Wednesday reposted his own tweet from 2020 in which the Web Summit boss had quoted one of Voltaire’s contemporaries, the “great” Denis Diderot, as he described him. Cosgrave did this seemingly in reference to the week’s other drama – the Dáil speaking rights fracas. But it was certainly tempting to see it in the context of his own extremely public altercation: a hint, perhaps, that he had heard the judge’s message.
The main outcome of the settlement is that Cosgrave has now agreed to acquire David Kelly’s and Daire Hickey’s shareholdings in Manders Terrace, the Web Summit trading company – respectively 12 per cent and 7 per cent. However, the sale price has not yet been made public.
[ Web Summit shareholders settle acrimonious disputesOpens in new window ]
The issue of valuation was due to be thrashed out in the court. Hickey’s barristers said last week the court would hear evidence that the true value of Web Summit was somewhere between €280 million and €360 million.
According to this valuation, Hickey’s 7 per cent stake would be worth between €19.6 million and €25.2 million. Kelly’s 12 per cent stake, meanwhile, would have a value of between €33.6 million and €43.2 million.
While some discount will probably have been applied, the cost to Cosgrave is still likely to be in the tens of millions.
In reality, the case was probably always going to be settled before the nine weeks allotted to the trial in Court No 29 had expired. Five cases were due to be heard together over that time, with Cosgrave suing Kelly for breaches of his directors’ duties and the Web Summit chief executive, in turn, facing claims from Kelly and Hickey for shareholder oppression and breaches of a profit-share agreement.
With no fewer than seven senior counsel and an army of legal support troops involved, it is somewhat remarkable that three savvy businessmen let matters roll even into a second week. Cosgrave’s legal bills alone have likely reached €7 million, the court heard last week, with Web Summit understood to be picking up all or some of that tab, according to what was heard in court.
In the end, the case lasted a mere seven days in the High Court, time enough only for the sides to dig their respective forward trenches over four days of opening statements last week.
Witnesses had been slated to begin giving evidence this week, with Hickey the first to enter the box on Tuesday. This was to be the real meat of the five cases, which Bernard Dunleavy SC, for Cosgrave, described last week as being “connected by a bitterness that animates every aspect” of the proceedings.
Hickey’s evidence was pre-empted by the judge’s exhortation and subsequent dealmaking among the legal teams.
Still, the public caught interesting glimpses under Web Summit’s bonnet that would never have been possible if matters had been settled amicably or otherwise a few years ago.
There was a suggestion during the trial that Cosgrave retained a high degree of control over the company during his six months away from the business after resigning as chief executive in late 2023 under a cloud after a backlash to his tweets about Israel and Gaza led to several high-profile sponsors pulling out of that year’s flagship Web Summit conference in Lisbon. Cosgrave subsequently returned to the fold in April 2024.
The court was shown a Slack message sent to all Web Summit employees on March 6th, 2024, detailing some incendiary claims about Kelly. When his lawyers sought more information about the message, solicitors for Cosgrave told them that the message was “inappropriate” and “ought not to have been sent”.
They also conceded the message was sent by Web Summit’s chief people officer Ronan Mooney “under the direct instruction of Paddy”. This, Kelly’s barristers said, was at a time when Cosgrave was “ostensibly” not supposed to have any role with Web Summit.
In his opening remarks on Hickey’s behalf last week, Eoin McCullough SC told the court that Cosgrave’s pay had increased to a “drastic” extent in recent times.
Early on in the Web Summit story, the three former partners had been paid similarly, the court heard, with Hickey on a salary “in the region” of €90,000 in 2016. After his departure in 2017, Cosgrave’s and Kelly’s salaries increased. Cosgrave was paid a base salary of €266,667 in 2018, McCullough said, and a bonus of €166,000.
Then, in January 2018, Cosgrave wrote an email to Web Summit’s then chief operating officer. “Just a note,” he said. “I am increasing my salary to €250,000 effective from January. I also want to assign a bonus for last year of €75,000.”
He also talked about “making a transfer of approximately €750,000 to his personal holding company at the end of the month”, McCullough said.
His salary ballooned again to €500,000 in 2023, the year in which he resigned. Having returned to the chief executive’s desk in April 2024, his basic pay for that year “appears” to have increased to €950,000, McCullough said. He was also rewarded with a “signing-on bonus” of €1 million upon his return.
Cosgrave also received “substantial personal loans” from Web Summit over the years, the court heard, which he has repaid “from time to time”. However, the loans have been of “significant benefit” to him due to their low rates of interest.
These are details that few private businessmen would want in the public domain. Perhaps they also give an insight into the way the company, around which Cosgrave’s grip has tightened as a consequence of the settlement with the minority shareholders, is run.
Hickey and Kelly will certainly be relieved to draw a line under the matter and move on with their lives. The latter, the court heard last week, had threatened to quit Web Summit on several occasions over the preceding decade, ultimately failing to escape its and Cosgrave’s orbit until his departure in 2021 amid deep animus with his former Glenstal Abbey school chum.
It was not particularly surprising that Kelly was the only one of the three parties to avoid court on Thursday morning when the settlement was announced. More of a behind-the-scenes figure within the company from the off, Kelly is made of different stuff than Cosgrave and Hickey. He is a person who “can become stressed by events”, his barrister Michael Cush SC told the court last week, who “goes out of his way to avoid confrontation”.
Confrontation became a reality when Cosgrave sued him in 2021, alleging that he caused Web Summit a loss of more than $10 million by setting up an investment fund that traded off the tech conference’s name when he resigned from the company’s board.
Kelly strongly denied the claims, which have now been dropped entirely. Bernard Dunleavy SC, for Cosgrave, accused Kelly during the trial of a “deep, deep duplicity” over his handling of the matter. At the same time as he expressed his desire to leave Web Summit, he was also making arrangements to “swipe” the second fund from “under Web Summit’s nose”, Dunleavy said.
Cush refuted those allegations in his opening submissions last Thursday and opened his own line of attack in Kelly’s complaint of shareholder oppression against Cosgrave. Crucially, he said that, from 2019, Cosgrave had embarked upon a campaign to insinuate that damaging material or “kompromat” was being held over Kelly by Hickey, who, by that point, had become public enemy number one for Cosgrave.
He began publicly and privately referencing “the four floors” incident, Cush said, understood to be a reference to a place in Singapore known colloquially as “the four floors of whores”, part of a modern office building “devoted to bars, strip clubs and that kind of thing”. He said the suggestion that Hickey held damaging information over Kelly was “an invention” of Cosgrave’s, used to justify his own behaviour towards his former business partners.
Hickey – who was accompanied throughout the proceedings by his parents and, in recent days, his husband Mark Grennan – appeared to be preparing to enter the witness box until Wednesday afternoon. Although the former journalist who now runs his own PR company would have faced a bruising cross-examination from Cosgrave’s lawyers, he might have relished the chance to discuss and finally address the 2016 sexual harassment complaint against him by a Web Summit employee and long referred to by Cosgrave in tweets and in the litigation itself.
The court heard that Web Summit had never afforded him the chance to respond to the claim when it was made in 2016, nor was he even aware that a formal complaint had been made until much later. McCullough told the court that Cosgrave had attempted to weaponise the allegation, which Hickey vehemently rejects, to “blackmail” and “intimidate him” into giving up his shareholding in the company.
In return for all of that effort, rancour and bad feeling, Cosgrave has seemingly won the right to tell the world that he and he “alone” founded Web Summit in 2009. He somewhat bumptiously told reporters outside the Four Courts that the settlement agreement “vindicates everything Web Summit has done to protect its interests and stand up for its principles”.
Tweets that he posted about his former friends – some of which formed part of an alleged campaign of blackmail and intimidation against Hickey, the court had heard – would not be removed from social media “because they’re true”, he also said. “Hopefully, they’ll also serve as a cautionary tale.”
Not 10 minutes after the end of the trial, problems already seemed to be bubbling to the surface. A source close to Kelly and Hickey told The Irish Times that Cosgrave’s tweets are “no more true now than they were when he first posted them and were strongly contested in the court proceedings by Daire and David’s legal teams”.
“All allegations have been dropped in this case,” the source added, “those include Paddy’s allegations against David and Daire”.
Safe in the knowledge they have managed to achieve some value for their shares in the business at Cosgrave’s expense, Hickey and Kelly will probably let that one slide for the moment. The dispute is listed again for hearing on April 29th, a court outing that should be entirely procedural. Unless, that is, there is any kind of hiccup in the execution of the deal set out under the settlement agreement.
