A bitter legal row involving Web Summit chief executive Paddy Cosgrave and two minority shareholders in the tech conference company, Daire Hickey and David Kelly, is being heard in a civil trial at the High Court today.
The several cases – taken by Mr Cosgrave against Mr Kelly initially in 2021 and variously by Mr Kelly and Mr Hickey against Mr Cosgrave – will be heard together and are expected to take nine weeks.
In the morning, Mr Cosgrave’s representative outlined his case, which is that Web Summit shareholder David Kelly was faithless and caused a loss to the company by founding a competing venture capital fund.
While Mr Hickey and Mr Kelly had a role at Web Summit, only one man has been there through it all and that is Mr Cosgrave, his barrister, Bernard Dunleavy, said.
- News report: Web Summit director engaged in ‘active deception’, court hears
Who’s who
Paddy Cosgrave: majority shareholder and chief executive of Web Summit. In late 2021, he sued David Kelly seeking damages of $10m over claims he caused a loss to the company by, among other things, founding a competing venture capital fund using Web Summit resources.
David Kelly: owns 12 per cent of Manders Terrace, the holding company behind Web Summit. A former school friend of Mr Cosgrave. Denies Mr Cosgrave’s allegations, and sued claiming his rights as a minority shareholder have been oppressed. He said his relationship with Mr Cosgrave had become “irredeemably toxic” leading up to his resignation as an employee of Web Summit in early 2021 and that his former friend had “run the company in a manner akin to a personal fiefdom”.
Daire Hickey: owns 7 per cent of Web Summit, then brought a similar shareholder oppression action against Mr Cosgrave in November 2021. Both men sued Mr Cosgrave again in 2024, arguing that Web Summit and their shareholdings had been damaged by Cosgrave’s tweets about Hamas and Israel, his subsequent resignation from the company and later return.
Mr Cosgrave strong denies all of the allegations.
Mr Hickey and Mr Kelly want Mr Cosgrave, who strongly denies their claims, to acquire their stake in the business.
An exchange connected with setting up of fund 1 - which pre-dated the second fund over which Mr Cosgrave is suing - has been brought before court.
The text messages are between Mr Kelly and Mr Cosgrave on October 31st 2017.
Mr Kelly texts saying do you trust me.
Cosgrave says yes.
Kelly said he thinks Web Summit should stay separate from the fund...“Like DOB” [which references denis o brien] does with Paul Conroy.
Cosgrave responds saying they need a strong ethical framework from the start and that the suggestion sounds reasonable.
Mr Dunleavy says messages show that Kelly identifies himself as agent in relation to this fund. he denominates himself as Web Summit’s agent, says Mr Dunleavy, for Mr Cosgrave.
We’re back up and running at the High Court.
Mr Dunleavy says he completed his review of the law before lunch and is now bringing the court through some key documents for mapping out the chronology between David Kelly and Web Summit.
How much is Web Summit worth? In his 2021 grounding affidavit, Mr Hickey claimed that Web Summit could be worth between €200 million and €350 million at the time, valuing his 7 per cent stake holding at somewhere between €14 million and €24.4 million.
And we have reached lunch at the commercial court, so it’s time for a break. The court will pick back up where it left off shortly.
The court is busy but not packed as Mr Cosgrave’s barrister goes through the law and legal precedents.
Mr Cosgrave is sitting on one side, with Mr Hickey and Mr Kelly on the other, though not right beside each other.
There’s a court sketch artist capturing proceedings.
Ian Curran, who has followed this story for a long time for The Irish Times, has a summary of the evidence so far here.
The conference is like “the Klondike or the gold rush in California”, the barrister said, “except everyone is wearing comfortable t-shirts”. “Everyone is trying to find the next thing or be the next thing. But only one entity has all the information to be able to match capital to companies and that is the company behind the conference itself.”
The court is hearing of various aspects of companies law and previous judgments from Mr Dunleavy, representing Mr Cosgrave.
For those in need of a quick refresher on this long-running and bitter row’s background, this morning’s In The News podcast is available here.
Web Summit Showdown: Why the three co-founders are heading to court
The High Court is set to hear revealing details on the workings of one of Ireland’s most high profile companies: Web Summit.In a civil trial that is set to last nine weeks, the three former friends who founded the tech events company – Paddy Cosgrave, David Kelly and Daire Hickey – will lay out their grievances against each other.Cosgrave, the better known of the three, has a majority stake in the company with a whopping 81 per cent, Hickey has 7 per cent and Kelly 12 per cent.There are five individual cases to be heard in a civil trial that is expected to last around nine weeks.Catherine Sanz, author of Drama Drives Interest: The Web Summit Story explains the background while Irish Times business reporter Ian Curren tells what dirty laundry might be aired.Presented by Bernice Harrison. Produced by Suzanne Brennan
Mr Dunleavy has handed a bundle of papers to the judge.
Documents will play an important role in the case, he said earlier.
Alan Betson has captured some of the principals arriving to the High Court this morning.
The company’s position is that David Kelly’s resignation was effective from April 14th, 2021, Mr Dunleavy says.
The court is faced with a case of active deception on the part of David Kelly.
The company had a chance to rollout a second venture fund with its own resources, staffed, moneyed and embedded in Web Summit events. Mr Kelly co-opted that opportunity himself for his own private property. He stripped the company of its opportunity to roll out that fund.
Mr Kelly proved himself to be disloyal and faithless, says Mr Dunleavy.
There is simply nothing like Web Summit operating anywhere else, Mr Dunleavy, for Mr Cosgrave, tells the court.
Success has many fathers but failure is an orphan. There is no one person exclusively responsible for Web Summit, he says. Mr Kelly and Mr Hickey are former directors and employees and they deserve a large measure of credit - but only one person has been there through it all: Paddy Cosgrave.
The court will hear evidence from Mr Cosgrave, who has an outsized public profile and drives Web Summit forward, Mr Dunleavy says. He also says many people have an opinion about Mr Cosgrave without knowing the first thing about him.
He is never satisfied and never stops. He continually looks to generate continuing opportunities for the business, the court is told.
The claims are connected by a bitterness which animates every aspect of the parties' respective proceedings, Mr Dunleavy tells the court.
He says the court must have been reminded of the more regrettable aspects of family law rather than the sort of claims that one might expect to see in the commercial court.
Bernard Dunleavy, for Mr Cosgrave, will begin by explaining background of proceedings to court, he says. The case will feature documentary evidence.
Mr Cosgrave’s team comprises Bernard Dunleavy SC and Derek Shortall SC instructed by solicitors firm Clark Hill.
Mr Hickey is represented by Kelley Smith SC, Eoin McCullough SC and Brian Conroy SC, who are instructed by Dentons. Mr Kelly’s team includes Michael Cush SC and Joe Jeffers SC.
Welcome to our live coverage of today’s evidence in the Web Summit court case. The three men at the centre of the various claims, Daire Hickey, David Kelly and Paddy Cosgrave, have arrived. The case will begin shortly before Mr Justice Michael Twomey at the High Court.
