The High Court has ordered four properties owned by Charles Kelly Limited to be transferred to one shareholder as consideration for his beneficial shares, following a dispute that had left the company’s two equal beneficial owners unable to run it together.
In a judgment delivered on 19 June 2012, Ms Justice Laffoy valued William Kelly’s beneficial shareholding at €339,000 as at 31 August 2011. The transfer is subject to him remitting €165,000 to the company. The judgment identifies the four properties as non-core properties in Ramelton, numbered 8, 10, 11 and 12 in the valuer’s report.
The court had previously found that Mr Kelly exercised his powers as a director oppressively towards the petitioner, Edward Gerard Kelly, and that their relationship had broken down irretrievably. An earlier remedy provided for the company to purchase Mr Kelly’s 3,968 shares at fair market value, with €165,000 set off from the price to reflect legal fees taken from company funds and not repaid. Mr Kelly had resigned as a director.
The court-appointed Deloitte & Touche valuer assessed the beneficial shareholding at €250,000, which would have left €85,000 payable after the set-off. Justice Laffoy accepted the valuer’s overall approach, including not applying a minority-shareholding discount. She also accepted an asset-based valuation, given the company had been loss-making since 2006 and the outlook for a return to profit was uncertain.
Property values were the main point of contention. A CBRE desktop valuation put the twelve company properties at €2.213 million as of 31 August 2011; Property Partners valued them at €3.958 million. The four Ramelton properties were valued at €339,000 by CBRE and €640,000 by Property Partners. The judge said transferring those properties in specie would best achieve fairness between the parties in light of the uncertainty over property values.
The judgment records a contingent asset of €232,500 for compensation relating to land taken under a compulsory purchase order, and estimated potential liabilities of €146,000 to €346,000. The judge accepted the valuer’s decision to make no adjustment for these contingencies, given their uncertain nature. The supplied judgment ends with the valuation and transfer conclusion; it does not set out further operative terms.