The High Court has narrowed an interim injunction in a dispute over shares in the Munstergroup, allowing the defendants to deal with the companies’ shareholding except for 2.5% that must be transferred to Ivan Cawley.
In an ex tempore judgment delivered on 21 September 2023, Mr Justice Rory Mulcahy said Cawley was prima facie entitled to the 2.5% stake under his 2012 employment contract. The defendants did not advance an arguable defence to that claim at the interlocutory hearing. The judge said there was no exceptional reason to refuse limited injunctive relief protecting that entitlement.
Cawley began proceedings in June 2022, seeking declarations and orders concerning a 7.5% shareholding, as well as additional shares he says he became entitled to after the companies acquired shares previously held by others. The defendants dispute his entitlement beyond 2.5%, and their defence argues that most of the claim is statute-barred. Those issues remain for the proceedings to determine.
A proposed sale of the companies’ entire shareholding was at risk. The defendants said the purchaser needed to acquire all the shares and that the sale might collapse if it could not. They also said the transaction would provide for payment to Cawley for his 2.5% stake and include a €10 million escrow account for transaction-related claims.
The judge held that the disputed additional shares stood on a different footing. Cawley had shown a fair issue to be tried, but any further entitlement had not crystallised and depended on the outcome of the case. Mulcahy said damages would be an adequate remedy for any eventual loss relating to those additional shares, and that the defendants appeared able to meet such an award. He refused an injunction preserving Cawley’s claimed rights beyond the 2.5% stake.
The court had earlier granted an interim order restraining a sale unless at least 7.5% of the issued share capital was retained. Mulcahy proposed replacing it with an order allowing the defendants to deal with the entire shareholding, provided the 2.5% was dealt with only by transferring it to Cawley. He said this would protect Cawley’s rights while leaving the defendants able to pursue a sale, including through a properly authorised drag-along clause or the statutory procedure for acquiring minority shares.
The judge did not make the final form of order. He said he would hear the parties on its wording, including whether it should be made against all five defendants. The underlying share-entitlement dispute remains unresolved.