Builder Tom Bailey has claimed a trustee of a discretionary trust he set up for his family has engaged in a “blatant attempt at a shakedown”.
Mr Bailey and his brother Michael, who set up Bovale Developments, figured centrally in the 1990s planning tribunal, although adverse findings against them were later removed from the tribunal’s report.
In 2020, Tom Bailey set up the Culcommon Trust whose beneficiaries were his wife Caroline Bailey and their two children, Ellen and Jeff, as well as the St James’s Hospital Foundation (Urology) and the National Breast Cancer Research Institute.
The trust administrators/co-trustees were Sopal Ltd and Citadel Corporate Services Ltd, whose sole director is Ronan Barrett.
In proceedings brought by Ms Bailey and her children, which were admitted to the Commercial Court on Monday, it is claimed Mr Barrett/Citadel are seeking to profit from his position acting on behalf of the trustee. They also seek an order removing Citadel as trustee.
The claims are denied.
The trust’s main asset is 250 acres of development land on the border of Kildare and Meath, at Moygaddy near Maynooth. The land is held through Skycastle Ltd, an Isle of Man-registered company, which has proposed a major development including a technology/business park, residential units, sports campus and public hospital, on the land.
To unlock funds for the development, debt funding needs to be raised to purchase shares held by a company called Sky Castle holdings under call options involving various other companies.
One of those companies is Moygaddy Holdings, of which Mr Barrett is also a director. Moygaddy owns 35 per cent of the shares in Sky Castle Holdings.
In an affidavit, Mrs Bailey said that in early 2021 Mr Barrett began to reference a desire to exit his/ Citadel’s role in the trust and in a related company called Glenvala Limited Partnership.
Mr Barrett said he wanted to focus on his other business activities and by way of payment for his work with Citadel he proposed he should receive a shareholding/profit share in the Culcommon Trust, Ms Bailey said.
A meeting took place between Mr Bailey, the other co-trustee Sopal, Mr Barrett and his solicitor in late 2021. Sopal later wrote to Mr Barrett saying an equity stake for him was never agreed and would not be appropriate. Sopal said Mr Barrett should submit invoices for the time he spent working for Citadel.
In autumn 2022, Mrs Bailey said, Mr Barrett wrote to Sopal making allegations against Sopal and Mr Bailey including that various actions by those two parties were prejudicial to certain companies forming part of the trust assets. Mr Barrett also later also expressed concern about the integrity of the trust.
Ms Bailey said this was nothing more than a pretext for advancing his claim for a share of the trust assets.
Around the same time, Ms Bailey said, companies within the Culcommon Trust were advancing negotiations with Cardinal Capital to fund the exercise of the share buyout option from Sky Castle.
Last December, she said that to her “great surprise” Cardinal presented a condition of future funding that the dispute between Mr Bailey and Mr Barrett/Citadel must be resolved before any funds would be provided.
Mr Bailey emailed Mr Barrett shortly before midnight on December 23rd last asserting that he and Citadel had since mid-2021 been seeking to leverage his position as trustee and director for his own personal gain.
He said Citadel, as co-trustee, was engaged in “a blatant attempt at a shakedown” and seeking to make significant personal gain from exploiting what Mr Barrett clearly understood to be a critical position of commercial vulnerability for Moygaddy Property and the Culcommon Trust.
On February 13th last, Cardinal Capital demanded that a settlement of the dispute between Mr Barrett and Mr Bailey be signed by March 3rd next or else negotiations for potential lending will cease.
Mr Bailey had already asked Mr Barrett for Citadel to resign as trustee but this was refused.
It is claimed in the proceedings that Mr Barrett/Citadel and related entities have taken numerous harmful steps to exert pressure on Mr Bailey and/or his wife and children to accede to their demands in relation to the trust.
The application to admit the case to the Commercial Court was made by Michael Cush SC, for the plaintiffs, on consent between the parties.
Mr Justice Denis McDonald adjourned it to next month for further directions on how the case should proceed.
