The High Court disqualified four former Eurosurgical Limited directors for periods ranging from nine years and nine months to 15 years, after finding their admitted conduct included fraud, breaches of duty and unfitness to manage a company.
In a judgment delivered on 14 January 2022, Mr Justice Allen said the disqualification periods agreed in a November 2021 settlement did not sufficiently reflect the seriousness of the company’s business transfer to Gemini Surgical Innovations Limited shortly before Eurosurgical went into liquidation. The court ordered 15 years’ disqualification for Ray Kane Senior, 14 years and three months each for Alan Kane and Gary Kane, and nine years and nine months for Alison Kane.
The case was brought by liquidator George Maloney. The parties had admitted the facts pleaded in the applicant’s points of claim and agreed to disqualification orders for minimum periods of 15 years for Ray Kane Senior, 12 years for Alan and Gary Kane, and seven years for Alison Kane. The judge said the evidence established grounds for disqualification, including fraud, breach of duty and conduct showing unfitness to manage a company. He considered whether the agreed minimum periods were sufficient; he did not conduct a contested trial of the admitted claims.
The admitted facts included more than €13 million taken from the company between 2005 and its winding up in 2016, underdeclared tax liabilities of about €5 million, and resulting interest and penalties of about €7 million. The respondents admitted deliberate failures to keep accurate books and account for significant tax liabilities, as well as personal and connected-party spending through company funds.
The court focused in particular on a May 2016 agreement that purported to transfer substantially all of Eurosurgical’s assets to Gemini at a significant undervalue. The respondents admitted knowing the company was insolvent or close to insolvency and that Revenue assessments were imminent. The transfer was later declared void by consent. The judge said the handling of the company’s customers and suppliers reduced the goodwill value ultimately realised by €1,653,500 compared with an earlier offer.
The respondents’ agreed money judgments were also made: €18 million against Ray Kane Senior and Alan Kane separately, and a joint and several €18 million judgment against Gary and Alison Kane. Execution was stayed on terms set out in the settlement. The court ordered that the settlement be received and filed and stayed further proceedings, with liberty to apply to enforce its terms.