A former chief executive and former executive director of spreadbetting company Marketspreads Ltd have lost their High Court bid to halt bankruptcy proceedings brought against them.
Marketspreads Ltd, now SFS Markets Ltd, has petitioned for the bankruptcy of Brian O’Neill, The Copse, Beresford, Dublin, and Fergus Rice, Pembroke Road, Ballsbridge, Dublin, over their failure to pay €1.2 million of judgments for €1.68 million obtained on consent against them by Marketspreads in March 2012, just weeks before the firm was suspended by the Central Bank.
After the bankruptcy proceedings were initiated, both men issued proceedings against SFS Markets Ltd for orders including one marking the judgments obtained against them as satisfied.
In her judgment yesterday refusing to dismiss the bankruptcy summonses, Ms Justice Elizabeth Dunne said both men had claimed Ray Curran of Marketspreads had assured them before the judgments were obtained that, if they consented to judgment and sold their shareholdings in OR Spreadbetting Ltd, that would satisfy the judgments.
Mr O’Neill had valued his shares in OR Spreadbetting Ltd at some €2 million, as of the last transaction date in 2010, she noted.
Mr Rice valued his shares at about €1.8 million at the same time.
Marketspreads was suspended by the Central Bank on April 6th, 2012, and both men executed a share purchase agreement (SPA) with the company on April 17th, 2012. Mr O’Neill claimed Mr Curran told him on April 16th, 2012, the shareholdings held by Mr O’Neill and Mr Rice had to be sold immediately for €400,000 to have Marketspreads’ suspension lifted but the men would not be pursued for the remaining €1.2 million.
The Central Bank required, before lifting the suspension of Marketspreads, that the men be removed as shareholders.
Both men alleged they were reassured, when signing the SPA on April 17th, that, despite the wording of the SPA, they would not be pursued for the remaining €1.2 million, and said they would not have signed otherwise.
However, Mr Curran denied he agreed to accept shares of both men in OR Spreadbetting Ltd in full settlement of the sums due by them to Marketspreads and said he was never empowered to make any such agreement.
The judge noted John McNicholl, a director of Marketspreads, had said Mr O’Neill and Mr Rice tendered their resignations to Marketspreads in July 2011 after investigations indicated some €1.4 million was owed to Marketspreads by Sports Spread Betting Ireland (SSB), in which Mr Rice was the majority shareholder and Mr O’Neill also had an interest.
He said both men agreed to sell their shares in OR Spreadbetting and use the funds to repay the amount but neither could find a buyer and the debt remained unsatisfied.
Mr McNicholl had noted, while the sums wrongfully drawn from Marketspreads were described as advances to SSB, Marketspreads had been unable to establish the funds were actually applied to the benefit of SSB, and account statements suggested that a sum of €750,000 was paid into personal accounts of both men, having first been paid over to SSB.
Mr McNicholl had described accounting irregularities at Marketspreads, and said the Central Bank had become increasingly concerned that both Mr O’Neill and Mr Rice remained on the share register of OR Speadbetttng Ltd.
It was against this background the proceedings to obtain judgment against Mr O’Neill and Mr Rice took place, the judge said.
Having considered the evidence and the law, the judge found there are valid and binding judgments obtained by consent against both men in proceedings where both were legally represented.
No grounds had been advanced to make it appropriate for the court to look behind that judgment in any way, she ruled.
The men’s claims were contradicted by what they had signed, she ruled.
