The Secret Millionaire was a series woven from the fabric of the recession involving a rich benefactor hiding in plain sight. First up, in 2011, was John Concannon whose undercover mission was to find charities he could financially help out in West Dublin.

He came across Pieta House and forged a long-term fundraising link with the non-profit organisation that helps people at risk of suicide, and was later named philanthropist of the year.

For an earlier generation, Concannon was the guy on The Late Late Show in 1987 who had an innovative triple bucket for feeding calves. “Isn’t she a beauty?” he asked Gay Byrne of “the proverbial Irish bucket with a hole in it” the functionality of which he went on to explain on air. “And he looks such a gom!” said Byrne. 

Two very memorable television appearances made the Galway businessman a household name twice over. 

The upshot of The Late Late appearance was JFC Manufacturing, a thriving plastics firm based in Tuam which has been in turbo drive in recent years, increasing gross profits nearly threefold in five years to reach €14.2 million in 2017, according to the most recent filed accounts.

Unsurprisingly, given his success, Concannon has explored other business opportunities. He has an investment vehicle called Amazonite. 

One of the more unusual, and seemingly more costly excursions, was a foray into the Bulgarian fisheries industry, specifically mussel farming.

According to Concannon, €1.7 million was invested by him personally and JFC in a venture called Black Sea Shells (BSS). It didn’t work out. By late 2017, the company allegedly had debts of over €2 million.

By then, relations between Concannon and two of the shareholders had soured.

The Galway entrepreneur is now mired in a legal battle, which he claims is vexatious, brought by Danny McNulty and Noel McGreal, both from the west of Ireland. As shareholders, they make contested claims that Concannon essentially froze them out on the operations side of the business and in respect of their profit entitlements.

They allege they were not informed about company meetings and that their signatures were forged on resolutions passed by the firm’s shareholders.  

The action for damages is against Concannon personally for alleged breach of contract, negligence and misrepresentation of a shareholder agreement signed a decade ago. They claim the 66-year-old businessman, and those around him, engaged in deliberate and obstructive behaviour in allegedly failing to allow them have a hand in the firm. 

Their selected venue to litigate the claim is the High Court in Dublin rather than a court in the Balkans. Although this choice does not sit well with Concannon’s lawyers who are trying, on several grounds, to get the case struck out before it goes to trial. The strike out motion was brought before Justice Teresa Pilkington last week.

Harvesting mussels and profits in the Black Sea

Black Sea Shells (BSS) was set up in the Bulgarian port city of Varna, described by the Lonely Planet travel guide as the “most interesting and cosmopolitan town on the Black Sea coast”. With its long golden beaches and historic Roman baths, tourism is vital to the city’s economic welfare, but the region also hosts a number of chemical factories and Varna is Bulgaria’s largest fishing port.

The purpose of BSS was to build and renovate mussel farms. What first enticed Concannon to get on board the venture is not clear. Bulgaria joined the European Union in 2007 which may have been a factor.

In legal filings opened in court, Concannon states that McNulty and McGreal entered into a shareholder’s agreement with him on January 12, 2009.

Under the terms of that agreement, McGreal and McNulty were issued with 13 shares in the company and Concannon received 26 shares.  This meant Concannon held a 50 per cent stake in the firm in return for his initial investment.

His senior counsel Robert Beatty told the court his side maintain that this shareholding gave him certain powers to make decisions. There were two other shareholders in the company, but they are not parties to the dispute.

The company was up and running by 2010.

According to an affidavit filed by Concannon, only a limited number of matters were agreed under the auspices of the shareholders’ agreement. He says the document allocated shares, covered corporate governance, handled how loans would be serviced in the future, provided for immediate funding of €10,000 to clear pressing creditors and sketched out a corporate plan to harvest a yield of 200 tonnes of mussels in 2009 and over 1,000 tonnes of mussels in subsequent years.

Concannon claimed McGreal and McNulty “mistakenly” relied on this agreement as giving rise to a right to participate in managing the company and in its profit distribution. He says such rights are conferred through the company’s articles of association or Bulgarian company law, not through any specific agreement with him. He also claimed he was under no obligation to inform the two men of company meetings and operations as those sort of tasks fell to the general manager of the firm, Nayden Yordanov Stanev. 

McGreal and McNulty say the backdrop to the agreement was a memorandum of understanding enshrining certain entitlements. This, the court has heard, forms the “bedrock” of their claims against Concannon. However, Concannon’s lawyers have presented the memo as something akin to a gentleman’s agreement, a pre-contract that doesn’t carry the full force of law.

McNulty and McGreal deny making an early departure and claim they left when the meeting came to a natural end – to discover later that it had resumed in their absence. 

In a nutshell, McNulty and McGreal claim Concannon blocked them from participating in the management of the firm and failed to keep them in the loop about how the business was going. Specifically they allege that they were not informed of two general meetings of the company, on February 29, 2012 and June 27, 2013, and that their signatures were forged on a number of resolutions passed by the company on those dates. The court heard the first meeting involved the approval of the financial statements for 2011.

John Concannon pictured at the Four Courts. Pic: Thecurrency.news

Concannon paints a very different picture. He claims that after initial investments were made by the shareholders in 2009, he was the one who continued pumping money into BSS, financing a mussel farm on the Black Sea, the construction of a factory on the site and the refitting of a fishing vessel. 

He alleges McNulty and McGreal had a history of non-engagement in the business. Months after they were allegedly excluded from company meetings, he claims they called their own assembly on December 6, 2013.

Having expressed dissatisfaction with sales for 2012, he alleges they left the meeting early before a crucial resolution was passed on the future financing of the company. That resolution determined it was imperative that the shareholders make a financial contribution of €130,000 to the business within 100 days of the meeting. 

McNulty and McGreal deny making an early departure and claim they left when the meeting came to a natural end – to discover later that it had resumed in their absence. 

This is rejected by Concannon who claims in the wake of the resolution, McNulty and McGreal refused to make contact with company manager Stanev and did not respond to correspondence sent to them. He claims there was a lack of engagement for a whole year and that a decision was passed at a company meeting in December 2014, extending the period of time the two stakeholders had to comply with the resolution to increase their equity in the mussel business.  

The two men deny being contacted by Stanev and reject any assertion of prolonged non-engagement with the company. If anything, they claim it is more a case of vice versa. They allege they can produce evidence of visits to Bulgaria along with continuous demands they made for documents and accounts relevant to the company. They claim Concannon refused to engage with them and they were left feeling he was withholding necessary information from them about the business.

Things took a legal direction after the December 2014 meeting. In January 2015, McNulty and McGreal sought to have the equity proposals agreed by shareholders overturned in proceedings lodged against the company for negligence and breach of contract at the District Court in Varna. It was alleged that the decisions taken were invalid, that they had not been properly on notice of the meeting and that it had not been convened in accordance with Bulgarian company law. 

They lost. And lost again on appeal. Stanev is alleged to have produced evidence that significant efforts had been made to notify McNulty and McGreal of the two meetings leading to the Bulgarian court ruling they had been afforded an opportunity to take part in the company’s decision-making process. 

Is the Irish case simply a rerun of the Varna action, another attempt to litigate the same issues in a new jurisdiction? 

The domestic proceedings were filed in Ireland by McGreal and McNulty in June 2015. Soon after, Concannon’s side entered an unconditional appearance on behalf of the defence. Last week, the High Court heard this was a “mistake” based on the fact the plenary summons was “very bland” and he wasn’t aware of the substance of the case until the statement of claim was delivered at a later stage.

Why do they say it is a mistake? 

Concannon claims the correct jurisdiction for the proceedings is Bulgaria under the Brussels Recast regulation which determines where legal disputes are heard in the EU. He says the memorandum of agreement was signed in Bulgaria and the business is subject to Bulgarian company law. 

However, the High Court heard last week that if Concannon’s side wanted to challenge the case on jurisdictional grounds they should have done so at the start of the proceedings. Instead they entered an unconditional appearance back in 2015 and even filed a defence in February 2016. Senior counsel Jim O’Callaghan, for McGreal and McNulty, argued this was a tacit acceptance of Irish jurisdiction. “To put it bluntly judge, they’re too late. All the jurisprudence says if you’re going to challenge jurisdiction, you have to do it at the outset,” he said. One of the reasons for this is to avoid draining the court’s resources, O’Callaghan explained.

But there are other issues that Justice Pilkington must also decide as Concannon tries to throw a brick wall in front of the case.

Is the Irish case simply a rerun of the Varna action, another attempt to litigate the same issues in a new jurisdiction? 

Concannon’s side claims there is overlap between the two actions. But in court, Beatty stopped short of arguing res judicata, the legal doctrine that stops disappointed litigants having a second bite of the cherry. Instead he suggested it was “extraordinary” that claims which should and could have been litigated against the company in Bulgaria, given the timeline, were only now being advanced in Irish proceedings. 

He made the argument that McNulty and McGreal’s case is frivolous, vexatious and discloses no reasonable cause of action, and should be struck out under the inherent jurisdiction of the superior courts.

“You sue where the person is domiciled. These are all people from the west of Ireland who set up a mussel farm in Bulgaria. They go out there, it doesn’t work.”

Another central plank in Concannon’s case to strike out is that there exists no privity of contract between him and the business associates suing him. He says there is no cause of action against him personally because the only relations between the parties is their common ownership of shares in Black Sea Shells.

“The wrong party is being sued. The case should be in Varna against the company,” Beatty said.

“It’s wasteful and it is wholly unfair on my client that they would have a multiplicity of proceedings, and forum shop, when they don’t get what they want in the first set of proceedings,” he added.

McNulty and McGreal deny any allegations of forum shopping and say the Bulgarian and Irish cases are distinguished in character and in terms of the parties involved. It is their contention that the decision of the courts of Bulgaria has no bearing on the matters at issue in the Irish case. They also argue that the shareholder agreement is with Concannon personally.

“It is unstatable to state that these proceedings should be struck out,” O’Callaghan said.

“You sue where the person is domiciled. These are all people from the west of Ireland who set up a mussel farm in Bulgaria. They go out there, it doesn’t work.”

Justice Pilkington said she needed time to consider the strike out motion. She indicated she might deliver an ex tempore ruling on the matter this week.