On December 26, 2012, St Stephen’s Day, retired agribusiness tycoon Alastair McGuckian appears to have taken a moment out from the Christmas season’s festivities with its inundation of children and grandchildren to write an email, in “strictest confidence”, to his friend David Familiant. 

“Regarding my personal affairs,” it said. “Apart from my lawyer and my family, no-one other than yourself has knowledge of my plans.

“If I choose to go bankrupt it will be with the intention of transferring all my assets to Masstock Ventures,” the email continued. The message, exhibited in filings opened in court, went on to explain that the shareholding in Masstock Ventures would be split between McGuckian’s wife and their adult children.

It is not clear what Familiant’s immediate response to this missive was, or indeed if there was any. But within a year, lawyers were involved.

Here were two millionaire retirees. As friends and business associates, they agreed in 2010 to embark on a speculative investment in the toy industry in Israel. And then they fell out over money.

Familiant is a former executive vice-president of global research firm Gartner and a one-time client of jailed US ponzi fraudster Bernie Madoff. He has an address on the Avenue Princesse Grace in Monaco, up until recently cited as the most expensive street in the world for real estate.

With his brother Paddy, McGuckian co-founded the agribusiness giant Masstock back in 1970. With interests extending from Europe to the United States, Africa, China and the Middle East, by the noughties Masstock was generating annual revenues of over $1 billion.

But the last decade has not been so kind to the 83-year-old Antrim born entrepreneur who is claimed to have had a close shave with insolvency and is now locked in a legal battle over an alleged six figure loan to advance a smart toy invention called ChatPetz. More of which later.

The case, lodged in 2016 in the name of Familiant’s company, Societe Immobiliere Herbert, is set for a High Court trial in the coming months. McGuckian says he has a full defence to the claims against him.

The proceedings are relatively unusual in one respect. Over the course of a long career, the agri-businessman has not only shied away from publicity for the most part,  he has managed to avoid courtroom battles, factors which may go some way towards explaining why such a phenomenal Irish success story as the McGuckians’ has remained largely untold.

From Agri-Tech to Ha’Penny Bridge, the Musical

Briefly it goes as follows. Having inherited a 700-acre family farm in Masserene Park in Co Antrim in the 1960s, Alastair and his brother Paddy McGuckian branched out, applying their state of the art, vertical integration farming techniques internationally.

In 1976, their company Masstock struck gold, joining forces with Saudi royal Prince Sultan bin Mohammed bin Saud Al Kabeer to bring farming to the desert. The Saudis wanted to achieve food security through self-sufficiency. Together they set up what would become the region’s biggest retail dairy and food conglomerate, Almarai.

In 2004, Masstock divested its interest in Almarai. McGuckian, by then in his early seventies, was gradually retreating from his day to day business interests to diversify and focus more on passion projects.

Trapped in a hotel room in Saudi Arabia during the first gulf war in the early 1990s, he found time to write a musical, a love story set in civil war Ireland called the Ha’penny Bridge. The show opened in the Cork opera house in 2000 to mixed reviews.

Five years later, the musical was revamped for a fresh run in the Point Theatre in Dublin. A glossy gala opening night saw a capacity crowd with then president Mary McAleese as the guest of honour. Ireland soccer manager Brian Kerr, fashion designer John Rocha and Ava Astaire, daughter of Hollywood legend Fred, were also in attendance.

Other ventures backed by McGuckian and Masstock include the Enterprise Ireland supported Airvod which provided in-flight entertainment systems. 

The arts run in the family. Alastair’s daughter is the film-maker Mary McGuckian who is perhaps best known for directing an ensemble cast of Robert de Niro, Kathy Bates, Gabriel Byrne and Harvey Keitel in the 2004 film the Bridge of San Luis Rey, based on Thornton Wilder’s novel of the same name.

“I believe intensely in very high standards of production. I wouldn’t have survived in the Middle East against the likes of Nestle, Kraft and Danone if our standards weren’t better than theirs. We have a similar quality team in place for this,” he told the Sunday Times before Ha’penny Bridge went up the second time.

The father of four now lives in Rathmichael, Co Dublin. He has sat on the boards of the Crean Group and Prime Active Capital and supported emerging technologies in the health and pharma sector. He is a director of the medical imaging business M2i, based out of the private Blackrock Clinic hospital.

Other ventures backed by McGuckian and Masstock include the Enterprise Ireland supported Airvod which provided in-flight entertainment systems. 

In and around 2010, he got behind a new children’s smart toy called ChatPetz which is how he ended up crossing swords with Familiant.

“In order to be successful in the kids’ market, you have to think like a child”

Michal Laor

ChatPetz was the creation of the husband and wife team Ilan and Michal Laor, two-time winners of Hasbro’s award for best new invention. Their idea was to cross a cool tech toy with the warmth and “magic” of an old-fashioned cuddly toy for young kids. 

During a 2014 promotional round for ChatPetz and their company Toy Toy Toy, it was reported that the Laors had previously sold 200 million units of toys worldwide. 

Google the name ChatPetz and various promotional videos pop up of the toys in action. Most date from around five years ago when the company was crowdsourcing development funds for an open content platform. On the website Indiegogo, the Laors appear to have reached 15 per cent of their target sum of €36,334.

To a casual observer, ChatPetz characters, with names like Pammy, Piff, Pizz and Poggy, appeared to have much in common with Furbies, the late nineties interactive toy phenomenon. Built-in to their systems was a capacity for two-way dialogues and singalongs. But they could also respond to prompts from a mobile app and other media sources. On offer was a cornucopia of dynamic downloadable content from maths puzzles to jokes.

Familiant claims that despite an “unconditional and irrevocable promise” to discharge the loan, none of it was paid back, putting a strain on the men’s previous good relations.

Familiant appears to have been first approached about the project by the Laor family while in Israel. They were looking for backing to develop and manufacture the communication technology for the toys. 

Familiant and McGuckian knew each other from time spent living in the South of France. The Antrim entrepreneur had got involved in what he describes as a reasonably successful Irish venture, Eumom, for the newborn children’s market. In court filings, he said he believed that this enterprise, along with his experience of Middle Eastern markets, made him someone worth approaching.

However, McGuckian also said he was hesitant to come on board the project.   While he and Familiant had several meetings about the product, he claimed at that time he was prioritising his own personal financial affairs.  Legal correspondence, opened in court, states that he was dealing with a number of different financial institutions owing to the economic downturn in Ireland, a “long and arduous process” which he soldiered through alone.

By McGuckian’s account, Familiant would only press ahead with the Toy Toy Toy venture if he agreed to assist him.

The Antrim businessman maintains he laid his cards on the table about his finances, from the outset, explaining to his friend that he only wanted to become involved in the venture on a “sweat equity” basis, providing valued business expertise. He said he indicated that his family company, Masstock, might provide some funding in the future.

He said a link up to big name industry marketing players Len Dunne and Stephen Greene of Corinthian Entertainment was enough to persuade Masstock to put up an initial sum of $50,000.

For his part, Familiant pumped substantial sums into the development of ChatPetz, at various stages appearing to lend or invest on behalf of McGuckian or his company between 2010 and 2012.

Airvod and declining fortunes

In June 2010, early on in the business relationship, an email allegedly from McGuckian to Familiant explained that his money was tied up for several weeks with Airvod in order to facilitate two test programmes the company was negotiating with Lufthansa and “Brussels air” for in-flight entertainment systems. The email explained that each trial would cost $750,000 but the pay-off, if successful, would be contracts worth up to $163 million. 

At this time, McGuckian appears to suggest that it is “a bit much” for Familiant to have to sub his contribution of $87,500 to the toy venture but in a reply, the Monaco based businessman assures his friend that it is not a problem. 

Airvod went into voluntary liquidation in 2012.

A rare photograph of businessman Alastair McGuckian

Later in 2010, the parties appear to have entered some form of loan agreements. Familiant  claims to have used the Panamanian vehicle Societe Immobiliere Herberts to advance €90,000 for the benefit of Airvod. Separate, McGuckian’s side was allegedly issued further loans of $237,000 for ChatPetz.

“I feel guilty about calling on your resources to my benefit. Of course anything you commit on my behalf will have 100 per cent support in all cases especially if things go wrong,” McGuckian  is alleged to have written to his friend in June 2011.

The final deadline to settle the debt is claimed to have been December 31, 2014. Familiant alleges that despite an “unconditional and irrevocable promise” to discharge the loan, none of it was paid back, putting a strain on the men’s previous good relations.  Familiant proposed that McGuckian’s founding shares in the toy venture would be held in trust until the debt was discharged.

Unfortunately, the ChatPetz investment did not work out. On affidavit, McGuckian blames the failure on an almost complete breakdown in relations with the Laor family. 

Emails as far back as June 2010 show tensions between Ilan Laor and the investors. A concerned Laor writes to Familiant looking for the $89,000 promised in development funding and querying if the investors are abandoning ship. The money was issued.

McGuckian has also expressed some concern at being pitted against Societe Immobiliere Herbert (SIH), a Panamanian registered firm. He said he had previously believed Familiant’s company to be a French entity.  

There were debates about equity and intellectual property rights.

By 2013, as efforts were being made to do some form of ChatPetz licensing tie-in with video game developer Outfit 7 and BBC children’s network, Cbeebies, concerns were expressed Ilan Laor might “frustrate” negotiations. Plans were made to move Laor from the role of chief executive to the position of chief technology officer and replace him with McGuckian’s son Ciaran.

By July of that year, the amount outstanding to Familiant had allegedly climbed to around $578,000. This included $90,000 owed for Airvod, funds paid into Toy Toy Toy and interest at least 7 per cent per annum.

While both men appeared keen to resolve the matter amicably, that did not come to pass.

In the legal proceedings Familiant initiated in the fallout of the Israeli investment, he alleged monies extended to McGuckian’s side had been personal loans. This is hotly contested by the Antrim born entrepreneur who claims he was acting on behalf of Masstock Ventures, a corporate entity. 

“In almost 50 years of business, I never conducted affairs in a personal capacity,” McGuckian maintained on affidavit. He relies on an alleged 2010 pledge agreement between Masstock, based in Jersey, and Familiant’s Panamanian company, Societe Immobiliere Herbert. 

Familiant maintains capital funds were passed on to McGuckian as an intermediary and that he then re-loaned the money to his company.  He says that in their email correspondence McGuckian never questioned his personal indebtedness, not until 2016 when he first filed an affidavit. For his part, McGuckian says his email exchanges with Familiant are mostly irrelevant and reflect the informal nature of their personal friendship, not the underlying contractual relationship.

McGuckian has also expressed some concern at being pitted against Societe Immobiliere Herbert (SIH), a Panamanian registered firm. He said he had believed Familiant’s company to be a French entity.  

Legal Costs

He queried the financial status of SIH and its ability to cover legal costs in the event that he should win out in the court case. McGuckian claims to have a full and bona fide defence. He has also stated the belief that Jersey, rather than Ireland, would have been a more suitable jurisdiction to hear the case.

Familiant disputes the content of  McGuckian’s affidavit, including the Antrim businessman’s claims that he was hesitant to get involved in Toy Toy Toy, that he was upfront about the state of his finances and that he had made it clear that he was offering his expertise in exchange for a stake in the venture. He challenges McGuckian’s claim that having put up $50,000 in start-up funds, Masstock did not commit to extending that investment.

On the contrary, he claimed that McGuckian had provided him with Excel sheets with financial projections on Airvod, to show that it was viable and would be a source of funds to repay monies owing. He claimed the entrepreneur also stated that an Irish business would provide him with an annual income of €300,000. 

“Later when I discovered your financial difficulties, you told me that you were selling one of your apartments in Villefranche, your home in Ireland and your mews home in London. Unfortunately, none of the proceeds of these sales were used to settle any part of your debt to me despite your repeated promises,” Familiant claimed in an email from June 2014. 

“Deeply Troubling” Meeting

But the most contentious claim from Familiant relates to what he called a “deeply troubling” meeting between the men on August 27, 2013. In a follow up email he says he was “stunned” to hear for the first time that McGuckian alleged not to own any assets, including homes, shares in Masstock, Airvod or any other funds. All were allegedly vested in his wife Margery, or through companies owned by her and other family members.

When Familiant threatened legal action, he claims it was made clear to him that Margery had no intention of paying off her husband’s debts. Having invested over $1.3 million, the fallout from ChatPetz had become an “ordeal”.

McGuckian denies transferring assets to his wife. It is “simply untrue” he said on affidavit.  On legal advice his wife had been the sole owner of the family home in Rathmichael since 1979, he added.

By late 2015, Familiant claimed the debt, including interest of 7 per cent, had risen to over €700,000. The following February he initiated a claim for summary judgment. 

However as the facts are in dispute, the case is now at the discovery stage ahead of a High Court showdown that looks set to delve deeper into the finances of one of Ireland’s more reclusive tycoons.