Two years ago, in November 2022, the shareholders of the Cosgrave Property Group sat down for a meeting. It had been a turbulent few years for the business, which had been founded more than 40 years earlier by brothers Peter, Joe and Michael Cosgrave.
Over the course of those four decades, they had built some of the best-regarded developments in the State, but they had also had their fair share of difficulties – not least the untimely deaths of both Peter and Joe in the previous three years.
And as they were grappling with their grief, the financial conditions for property developers in Ireland were changing. In the aftermath of Covid, businesses had been hit by higher interest rates, higher costs and tightening margins. All told, the world was becoming an altogether more challenging place to do business.
This was evident in the tenor of that November meeting between Michael (Mick) Cosgrave and his two sisters-in-law: Peter’s widow, Oonagh; and Joe’s widow, Denise.
As the minutes record, Mick rang the company’s head of finance about one of the group’s bigger loan facilities, which had briefly gone into default over the previous months.
The company had been supposed to dispose of a number of assets to pay down the debt but, because of Covid, the sale had been delayed. According to the minutes, that meant the loan had been “in default by the end of March because we didn’t have the funds” from those sales.
In some respects, it was just a technical breach of a covenant within a loan agreement, more indicative of the increasingly challenging conditions in the market than any difficulties within the company. Nonetheless all sides agreed there was a challenge, and that steps needed to be taken to address the changing conditions.
However, in the subsequent two years, there has been precious little agreement on anything else.
The directors of the group – Mick, and his brother William – have been winding down the business, selling off huge swathes of very valuable assets and reducing its significant debt pile.
Denise Cosgrave disagrees with that approach, and she has filed legal proceedings to have her husband’s shares transferred into her name, and to have a director appointed to the board to represent her interests.
Efforts to mediate the dispute between the parties this month failed, meaning the winding-up of the Cosgrave Group, after four decades could now take place within the four walls of the High Court.
For more than 40 years, the unusually publicity-shy brothers were among the most highly regarded builders in Ireland. They started out small with five sites in Dublin that they bought in 1979 before building an enviable reputation for plain dealing.
As Frank McDonald and Kathy Sheridan put it in their book The Builders, published in 2008: “The three brothers – Michael, Peter and Joe – must have stepped on someone’s toes during their long involvement in the Dublin property scene but, if so, no one seems to remember.”
Where other developers left “human debris and dismay in their explosive wake, the Cosgraves scatter pixie dust”, they added.
The past five years have been exceptionally difficult, however.
In 2019, Peter died aged just 59 after a long illness. Then in February 2022, Joe died aged 62. Mick was also suffering from a serious illness around that time while the company was – like virtually every other business in the world – dealing with the aftermath of the Covid-19 lockdowns.
The turbulence would reach a peak in the summer of 2022, with a particular eruption of tension between Mick and Denise over the transfer of Joe’s shares.
Denise expected the shares to be transferred swiftly and, when they weren’t, it was evidently a source of some frustration for her as exhibits submitted to the High Court demonstrate.
The beginnings of that dispute came as the company was trying to strike a crucial refinancing deal for its debts, which would involve a new debt deal but also the sale of a number of assets.
As emails from that summer show, Mick was keen to get the deal done swiftly in case one of his lenders might “take that decision away from us and appoint receivers over the assets”, in which case “we would collectively lose control over the decision”.
The question of the distribution of some of the assets had evidently already been discussed. Denise had expressed an interest in buying out the other parties’ two-thirds interest in the St Helen’s Hotel in Stillorgan, which the Cosgraves bought for £2 million in 1997.
The defendants – and specifically the first named defendant [Michael] – are opportunistically using [Joe’s] death to take control of the Cosgrave group
— Joe's widow, Denise, argued in her affidavit
Mick was open to the idea but clearly placed a greater importance on the finance deal, which he wrote in emails would not only avoid “any threat of default” but “[allow] us pay down debt from the proceeds of the residential sales, reducing our overall debt position, and hopefully gets us to a much stronger position where we can each agree to buy out each other’s interests in the remaining assets at the appropriate time that suits all”.
The summer passed without much progress on the debt deal, however. By November 2022, according to the notes of that shareholders’ meeting, it was clear that nothing had been signed.
The minutes show that the sides were still arguing over aspects of the deal, and over the sale of certain properties. Communications between the two sides were tense.
Late that year, Niall Glynn, a tax adviser from Deloitte, had been asked to come up with a way of improving communication and putting in place a shareholders’ agreement to formalise the governance of the company to everyone’s satisfaction. As part of that, according to emails submitted to court, there could be the appointment of new directors to represent Oonagh and Denise.
Various names were bandied about, with Glynn recommending someone with plenty of experience and “grey hair”.
That initiative was followed by another in 2023, when the accounting firm Browne, Murphy & Hughes was engaged to “review communications between senior management, directors and shareholders” about improving the quality of communication.
The Browne, Murphy & Hughes proposal urged more and better communication, including a proposed shareholder forum and quarterly reporting, but both sets of recommendations appear to have failed to produce the kind of harmony required.
There was still a dispute over the transfer of Joe’s shares. Denise was insisting that his shares in Genstar and JOM Investments, two the main companies in the family group, be transferred to her. Legal letters submitted to court show the group’s lawyers were insisting that she needed a grant of probate before she could be registered as a shareholder.
In June last year, Denise filed a lawsuit in the High Court, setting out her grievance and demanding that the shares be transferred. In her affidavit she argued that “the defendants – and specifically the first named defendant [Michael] – are opportunistically using [Joe’s] death to take control of the Cosgrave group”.
Furthermore, she said, they were proposing to take “wide-ranging and irrevocable decisions that will impact the entire future of the Cosgrave group, including the sale of a very considerable suite of assets and the incurring of substantial new debt”.
This would have the effect, she said, of “eroding” significant value while she waited for shares to be transferred to her.
She further alleged that she was being treated differently to Oonagh – who holds shares in the company – though she noted her understanding “that they [the directors] are currently in dispute with her [Oonagh] over the companies’ plans”.
She made particular reference to a presentation that was made at an unspecified date in 2022, which she called “the Eastdil presentation”, after the corporate finance company that had prepared it. In her affidavit she seemed to suggest that the Eastdil presentation contained a plan “to sell Genstar and JOM’s entire portfolio of assets”, which “comprise significant land banks of undeveloped residential and commercial property”.
While she had no objection to the sale of some assets, she said, “the sale of the entire portfolio is an existential decision for the companies” and should be taken only after she was registered as a shareholder.
Some mystery remains over just what the Eastdil presentation contains – Denise told the court she was required to sign a nondisclosure agreement – and whether it has anything to do with the “incurring of substantial new debt”, or what else it outlines for the Cosgrave group.
But it is clear that, in the interim, the group has continued to sell assets at a significant pace as the plan to wind up the company as it is currently constituted has accelerated.
In the past year Cosgrave has sold an enormous amount of property. In late 2023 and early 2024, for example, the company sold Gulliver’s retail park in Santry for €29.5 million to entrepreneur Tommy Kelly, and the Meridian Centre in Greystones, Co Wicklow, for €7 million. It also sold a 113-hectare land bank in Wicklow to Cairn Homes for a reported €80 million.
It also sold off the St Helen’s Hotel – which Denise had once hoped to buy – to the Scally family for a reported €45 million.
Several other big assets are still up for sale. In June, it advertised a portfolio of properties in Santry, north Dublin, consisting of a fully let office block and two residential sites, for sale with a guide price of €48.5 million.
It also put the West Pier Business Campus in Dún Laoghaire on the market at a guide price of €19 million.
Other assets being sold include two small apartment complexes at Hogan Place and Hogan Avenue in Dublin city centre, for which €4.6 million is being sought.
An examination of dozens of documents in the Companies Office shows that the sales have helped to write down a good chunk of debt on the books of various Cosgrave companies. The Cosgraves’ debts with Earlsfort Capital, understood to have been about €80 million, are now almost completely cleared after the sale of the St Helen’s Hotel and a number of office blocks around Dublin 2, while the West Pier office block in Dún Laoghaire is sale agreed.
The business also had substantial debt with two firms – Relm Finance and Castlehaven, which together had provided about €350 million to help take the firm out of Nama in 2020.
The Relm portion of that debt was secured against a swathe of high-value residential properties around Dublin, as well as assets such as the Swift Square portfolio in Santry, offices on Grand Canal Street, and the Ivy Exchange on Parnell Street.
A large number of the residential properties have been sold, while several of the commercial and retail assets are up for sale, working down the Relm loans. The Cosgraves’ debts with Castlehaven have also been reduced to nothing.
In the ordinary course of events, a construction firm will replace old debt with new, but company documents show no new debt for the Cosgrave companies.
None of which solves the dispute between Denise and Mick, which went into mediation in February to no avail. It was reported last month that the mediation had not succeeded and that no solution had been found.
All of which means the matter will now be resolved by way of a very public trial in the High Court, something that would ordinarily be anathema to the usually intensely private Cosgraves, something to which Denise adverted in her own affidavit, noting that “the businesses have always been operated discreetly; we are a low-key, private people, and I am anxious at the thought of the publicity that these proceedings will attract”.
That is unless peace breaks out in the meantime, and there was a recent development in Denise’s favour in that respect. As The Irish Times reported last month, probate has finally been granted on Joe’s will, giving her control of his assets, including his shares in the key companies in the Cosgrave group.
His estate was given a gross value of €124 million and a net value of €93 million but, most significantly in terms of the dispute, it leaves Joe’s interest in the Genstar group of companies to Denise, his sole executor.
The Irish Times sent emails to all of the parties involved before publication. The case, which is expected to take three days, will begin on February 11th.
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