Building supplier says ex-MD not entitled to sell shares to rival

A dispute between a building supplies provider and its former managing director following the sale of 10 per cent of its shareholding to a rival company has been admitted to the fast-track Commercial Court list.

The action relates to shares in Home Project Centre Limited, which operates from 12 locations, under brand names TJ O’Mahony, C&D Providers and PH Ross.

Home Project and three of its directors, Sean Moran, Sean McNamara and Emily Moran, have sued Dennis O’Connor, a former MD and board member of Home Project, following the sale of his 10 per cent shareholding in the company to rival Fosglow Ltd.

They have also sued Fosglow, which is the parent of Home Project’s rival Clondalkin Builders Providers Ltd, and Foxrock, Co Dublin-based husband and wife Alan Hegarty and Emma Maye, who are shareholders in Fosglow.

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Arising out of Mr O’Connor’s alleged breach of duty towards his former employer, the directors of Home Project claim they have exercised their power under the Companies Act to refuse to register the transfer of those shares from Mr O’Connor to Fosglow.

Fosglow, it is alleged, has refused to accept the validity of the plaintiff’s directors’ decision. The defendants deny any wrongdoing and reject all the claims made against them by the plaintiffs.

In their action, the plaintiffs claim that Mr O’Connor left Home Project in January 2021 after entering into an agreement with the company, which included him receiving a payment of €180,000.

It is alleged that following his departure from Home Project he entered into discussions about working for Fosglow.

It is alleged that as part of an agreement he entered into with Fosglow, Mr O’Connor, from Aghadoe, Killarney, Co Kerry who is represented by Bernard Dunleavy SC, sold his shareholding to Fosglow for €1.1 million.

Home Project claims that Mr O’Connor was not entitled to sell the shares to a rival.

Declaration

In their proceedings, the plaintiffs, represented by Rossa Fanning SC, seek a declaration from the court that Home Project’s directors have lawfully exercised their rights to decline to register the transfer of the shares in Home Project.

It is further alleged by the plaintiffs that Mr O’Connor has unlawfully disclosed commercially sensitive documents and detailed financial information belonging to Home Project to Fosglow, represented by Oliver Butler BL.

Arising from those alleged wrongdoings, the plaintiffs seek an order for damages from Mr O’Connor as well as the repayment of €180,000 paid to him under a settlement agreement when he left Home Project.

The plaintiffs’ claims are denied by all the defendants, who say they are entitled to have the shares registered in favour of new owners.

The court also heard that, in correspondence, lawyers acting for Fosglow agreed to return or delete and not use any confidential information about Home Project it might hold.

The matter came before Denis McDonald, the judge in charge of the big business division of the High Court, on Tuesday.

The judge said he was satisfied to admit the case to the fast-track list. There was no opposition to the plaintiffs’ application to have the case included in the list.

The judge adjourned the matter to a date in January 2022.