Fruit importer Fyffes has decided on a definition of profit that will be used in the forthcoming High Court hearing to assess what damages it should be paid by DCC in the long-running insider trading case.
The Supreme Court ruled in July that DCC executive chairman Jim Flavin held insider information when in February 2000 - at a time when he was a non-executive director of Fyffes - he dealt in Fyffes shares worth €106.7 million on behalf of his company.
The transaction earned his firm an €85 million profit, which was thought to be the upper limit of what the court could award in damages.
In an affidavit to the Supreme Court, DCC aired the view that the damages awarded should be limited to the difference between what it received for the shares and what the court estimates it would have received had the information in Mr Flavin's possession been generally available.
Yesterday, Fyffes told the High Court during a preliminary hearing in the damages case that it had made the decision to agree to a definition of profit being the difference between the amount DCC received for the shares and the amount it would have received had the information been available generally.
A spokesman for the company said the decision to proceed on this basis was "rooted in business pragmatism". He said it was based on legal advice that, if Fyffes sought damages based on a definition of profit that involved the difference between the price paid and received for the shares - in effect the full €85 million profit made by DCC - it could lead to a constitutional challenge from Mr Flavin's company, as this is the first case to test the law.
The spokesman said the decision by Fyffes "removed the risk of a constitutional challenge" and the possibility of the High Court's decision being overturned.
He said the company did not want the case "being tied up for another two years or so". "Fyffes has already achieved what it had set out to achieve - the successful prosecution of its case," he said.
DCC said in an affidavit to the Supreme Court that, if the information held by Mr Flavin were worth a 10 per cent fall in value, then Fyffes should get €10.7 million, and if 15 per cent, then it should receive €16 million.
Mr Justice John MacMenamin, will decide later this year the damages to be awarded and interest, if any. DCC made a provision of €50 million in its accounts in November which it believes will cover both the legal costs of the case, estimated at €25 million, which it must pay, and damages.
