Hotelier Noel O'Callaghan claims in Commercial Court proceedings that his two sons, who took over his affairs in 2016, isolated him and prevented him from exercising his right to regain control.
Mr O'Callaghan, 74, retired in 2016 from the business he built from scratch over more than 40 years. The first hotel his group acquired was the Mont Clare in Dublin in 1984.
In addition to the five hotels it manages, it also owns the 450-acre Mountarmstrong stud farm near Cashel in County Tipperary, as well as around 100 apartments rented out under the Só Living brand.
In his testimony, he claims he stepped back from day-to-day management of the group to focus on Mountainstrong and his horse breeding business, leaving routine management to his sons.
The transfer came just in time for his 66th birthday to preserve an important capital gains tax benefit.
It is alleged that by agreeing to transfer his shares to Saira Co Dublin Unlimited Company, where he is a director along with sons Paul and Charles, who now run the group, he sought to provide a “back-up position in the event of any future disputes” to regain control of Saira.
Accordingly, Paul and Charles, as well as his third son Brian, who was involved in the business until his departure in 2023, signed a power of attorney appointing their father as a proxy for each of them and entitled to vote on their behalf at Saira board meetings. This power of attorney is said to be still valid and binding.
As part of the 2016 agreement, his father was to be paid an annual salary of €500,000 for the rest of his life, have his credit card debt written off and be granted benefits and control over Mountarmstrong.
Following Brian's departure in 2023, a new shareholders' agreement was signed, but it reportedly did not override the 2016 agreement.
The stud farm, which houses numerous racehorses, is said to have been run by a Saira subsidiary, Sherborough Development Co Unlimited Company, and Noel O'Callaghan is the full or partial beneficial owner of the thoroughbreds.
It is alleged that from 2024, Paul and Charles attempted to exert control over the breeding stock by giving instructions on the valuation and sale of some animals without the father's consent.
In 2024, Noel sold his share in a commercial property called the Archers Building on Fenian Street in Dublin to Saira. It is alleged that KBC failed to disclose that it was negotiating a lease transfer for the building, which was eventually concluded for €16.6 million, leading to the building being undervalued at the time his father sold his share.
It is alleged that this represented significant non-disclosure and secret profit-making.
His relationship with Paul and Charles began to deteriorate in 2024 after they purchased a residential property in Warrenpoint for personal use, cancelled instructions on preparing directors' meeting packages and paid €3.2m in dividends to two sons.
When Noel challenged these decisions, his sons began to “freeze” him, cutting off his clerical support and stopping payments to him from Saira, including health insurance.
Noel filed a lawsuit against Paul and Charles, Saira and Sherborough.
The case was admitted to the Commercial Court on Monday on the application of Judge Martin Hayden, who, in response to a question from Judge Mark Sanphy, said that an attempt at mediation had already been made.
The judge noted that in cases involving close relatives, mediation is preferable.
He approved the agreed directions for further consideration of the case and adjourned it until November.
Sourse: breakingnews.ie
