Investment broker sues Sheehan hospital firm

A BROKER involved in a €90 million private hospital development recently completed by a company backed by Blackrock Clinic co-founder Dr Joe Sheehan is suing the business for almost €350,000.

Investor First, an investment adviser based in Sandyford, Dublin and run by businessman James Carroll, claims that Sheehan Medical owes it €285,000 plus VAT – a total of €346,275 – for sourcing the building that now houses the €90 million Cork Medical Centre, which the hospital operator opened last month.

Sheehan Medical is contesting this claim and claims that Investor First displayed a lack of good faith and deceit in its dealings with the company.

The case was the subject of a short hearing before the High Court yesterday. A further hearing is due in January, and a full trial could go ahead next year. According to court documents, Sheehan Medical, run by Dr Sheehan and his son James, hired Investor First in 2008 to work on a number of projects.

The following January, Sheehan asked Investor First to locate a suitable building for a private hospital in Cork and to raise finance for the property deal, in return for a transaction fee to be agreed.

Investor First says Sheehan Medical also agreed to give it equity in the project and to pay it a 3 per cent commission for bringing in third-party investors.

The broker subsequently located a suitable premises in Mahon in Cork city, built by local developer John Cleary, and, with the agreement of Sheehan Medical, began talks with the developer.

Investor First claims that, contrary to a clause in their agreement banning Sheehan from dealing directly with the owner of any building that was the subject of negotiations, the company contacted the developer involved and subsequently agreed a deal for a lease. Investor First says Sheehan Medical subsequently agreed to pay it €285,000 plus VAT for sourcing the building. The company says it may be entitled to other payments, as it believes that parties whom it introduced to Sheehan subsequently invested in the Cork development.

However, Sheehan Medical says it is not bound by the agreement to pay Investor First. It is understood the company will allege that the broker inflated the terms of the lease, saying it was €4.3 million a year instead of €3 million, and misled it on a number of other issues. Investor First maintains these allegations are unfounded.