Concert promoters Denis Desmond and Eamonn McCann are involved in a legal battle about the share of profits Mr McCann claims are due to him from various outdoor events in the State over a number of years.
Mr McCann, Deramore Drive, Belfast, claims he had become increasingly concerned about the manner in which Mr Desmond dealt with profits from an alleged partnership between them and had arranged for a “forensic” examination of books and records.
On the basis of that, he claims he is owed some €3.8 million as his profit share related to a number of events between 2001 and 2006 but that Mr Desmond claimed that figure should be €104,680. At no stage had Mr Desmond put a “realistic value” on the amount due, it is alleged.
Mr McCann alleges Mr Desmond had not kept the accounts and income of the alleged partnership - or joint venture as alleged by Mr Desmond - as a separate account but instead permitted those funds to be used by his MCD Productions company. Mr McCann also claims further monies received as sponsorship had been retained by another company controlled by Mr Desmond, Gaiety Investments.
Neither MCD nor Gaiety had any lawful entitlement to receive such monies or to make any deduction for expenses or overhead, it is claimed. It is further alleged Mr Desmond initially placed obstacles to Mr McCann gaining access to the accounts of both those companies.
The proceedings were admitted to the Commercial Court today on the application of Brian O’Moore SC, for Mr McCann, who said there was an ongoing investigation of books and records being carried out for Mr McCann by forensic accountants Grant Thornton.
Maurice Collins, for Mr Desmond, Vartry Lodge, Strand Road, Killiney, Co Dublin, , said it “beggars belief” a claim of such magnitude, if it did exist, would have been allowed to linger since 2006. The key claim was there had been a variation in the distribution of profits without regard to overheads but his side disputed that, counsel said.
In his claim, Mr McCann alleges he began a business relationship with Mr Desmond in the 1970s and they promoted and organised music events together. That relationship developed into a partnership but was never reduced to writing, he claims.
It was agreed in June 2006 Mr Desmond would buy Mr McCann’s share of the partnership in relation to the promotion and operation of outdoor concerts in the Republic for 4.66 times the average net profits of the partnership for the years 2003, 2004 and 2005, it is alleged. To give effect to that, Mr McCann claims it was necessary for him to see the relevant books and records of the partnership so as to calculate the profits for the relevant period.
It is alleged Mr Desmond later denied the existence of a partnership, was reluctant to disclose the books and accounts and provided limited information relating to accounts.
Mr McCann claims it became clear Mr Desmond had failed to keep proper books and records for the partnership and that partnership funds had become intermingled with funds and accounts of other companies of Mr Desmond’s. Mr Desmond later agreed to provide access to the books and records of MCD and Gaiety and it was arranged in December 2008 Grant Thornton would be given access to those.
Grant Thornton’s examination took some months and indicated no evidence of separate books and records maintained for the partnership, Mr McCann claimed. He claimed the firm found that payments which should have been recorded as partnership monies were recorded in the books of other companies of Mr Desmond’s.
As late as September last, Grant Thornton received new information from MCD about settlement statements for events in Lansdowne Road between 2002 and 2006, it is claimed. Mr McCann said the firm was given selected settlement statements with artists and certain settlement statements for Oliver Barry, event co-organiser, but it had not been possible to reconcile the two sets of statements.
