THE BANK-APPOINTED receiver to an Irish information technology company employing 60 people is seeking a court order setting aside an agreement allegedly transferring ownership of the company’s software rights to a Gibraltar-based company.
That agreement appeared “highly suspect” on the evidence before him, Mr Justice Peter Kelly remarked yesterday.
Kieran Wallace, appointed by Barclays Bank as receiver over Cognotec Ltd, Ely Place, Dublin 2, wants to set aside a July 2008 agreement allegedly providing the ownership of intellectual property (IP) rights of Cognotec Ltd be transferred to Syndicated Capital Investments Ltd (SCI), Main Street, Gibraltar, from that date.
SCI, which is in administration, had invested more than $2 million (€1.46 million) in Cognotec, but Barclays claims it has a priority charge over the assets, including IP rights, of Cognotec, and SCI has no entitlement to frustrate the receiver’s plans to sell those assets to an undisclosed buyer.
Mr Justice Kelly said he was satisfied the case was urgent, as the dispute over the agreement was holding up the planned sale.
He granted an application by Brian O’Moore SC, for Mr Wallace, to admit proceedings against SCI to the Commercial Court. The judge also ordered Brian Maccaba, with addresses in London and Israel, and Solomon Samuel Marrache, described as a finance director with law firm Marrache Co, to deliver up “forthwith” any documents they have relating to IP rights of software programmes granted to or by Cognotec in respect of its dealings with SCI.
Mr Maccaba and Mr Marrache are directors of Cognotec Ltd and of SCI. SCI is disputing the jurisdiction of the Irish court to deal with the case, and its application to set aside service of the proceedings on it will be heard next week. Mr Maccaba and Mr Marrache have until this afternoon to tell the court whether they have any difficulties about the order relating to handing over documents.
A solicitor said he had been consulted by Mr Maccaba and, if he was representing Mr Maccaba, would raise jurisdictional issues.
There was no appearance in court by or on behalf of Mr Marrache who, the judge was told, had been arrested recently by police in Gibraltar investigating matters including the alleged falsification of a letter authorising transfer of monies form a bank in Gibraltar to a Bank of Ireland account.
In an affidavit, Mr Wallace said Cognotec Ltd is part of the Cognotec group and holds the IP rights in software supplied to the foreign exchange industry. On January 22nd, Barclays Bank Ireland appointed Mr Wallace receiver to Cognotec Ltd and two other companies in the group which has four main software products, including RealStream Rate Manager, supplied to customers worldwide.
Barclays had in 2006 provided $12.5 million credit facilities to Cognotec Holdings Ltd, the parent company of the group, secured by charges over the assets and undertaking of Cognotec Holdings, Cognotec Ltd and Cognotec Ireland.
SCI and others in 2006 invested in Cognotec Holdings and SCI also advanced loans in 2008 totalling $2 million to Holdings. Mr Wallace said SCI was granted a second ranking charge in respect of the $2 million loans behind the security of Barclays and was also entitled to a licence to certain software belonging to Holdings for a nominal fee. However, SCI was not entitled to any proprietary interest in the software, Mr Wallace said.
Cognotec reported losses since 2006 and Mr Maccaba had made unsuccessful attempts from then to get a buyer or another investor.
From 2007, the Cognotec group was unable to adhere to a loan repayment schedule agreed with Barclays, and the bank demanded repayment. When no payment was received, it appointed Mr Wallace receiver and he began efforts to sell the business.
