Property developer Tom Coughlan is best known for his troubled stint at the helm of Cork City football club. Having bought the debt-riddled League of Ireland club out of examinership in 2008, it was back on the brink of closure over Revenue debts less than a year later, with Coughlan receiving an FAI ban for bringing the game into disrepute with his management practices. 

In 2010 Coughlan, who had previously stood as a candidate for the Progressive Democrats in the 1997 Cork local elections, bowed out of the club. He was later restricted as a director, according to documents from the Office of the Director of Corporate Enforcement.

But his wider property interests persist to this day. He controls several property companies and holds a 50 per cent stake in the Dublin-registered Irish Immigration Fund (IIF), a joint venture set up in 2014 to buy and develop lands in Cork. 

His shareholding is held through an entity called Urban Green Private Ltd (UGPL). The remaining 50 per cent is controlled by the Lyne Family Partnership (LFP), run by hotelier Riobard (Bob) Lyne. 

All is not well at IIF, however. 

Despite being highly solvent, with equity in the region of €14 million, UGPL is petitioning for a voluntary wind-up of the business. Coughlan claims the relationship of trust between the members has broken down irreparably since April 2020 due to him being systematically undermined and excluded from operations and baselessly accused of fraud, theft, forgery, and deception.

He alleges LFP has threatened to report him to the garda fraud squad for no reason, removed company directors and blocked his attempts to replace them, denied him access to company property as well as the books and records of the business. He also says the company has retained money due to a subsidiary of UPGL.

Essentially, he claims he has been frozen out of the day-to-day running of the company and no longer has confidence in its stewardship. He says he is concerned that the value of the business, and his approximately €7 million shareholding, is at risk of decline.

When the petition came before the Commercial Court last Monday, senior counsel Rossa Fanning for UGPL, described the 50-50 shareholders as deadlocked. Attempts by Coughlan’s side to have the matter fast-tracked into the Commercial list were put on hold as lawyers for the Lyne family partnership requested more time to respond to the motion.

Because the proceedings are at an early stage, Riobard Lyne, who runs three-star hotels in Killarney, Kenmare, and Ennis, has not yet had an opportunity to put his side of the story before the court. When contacted by The Currency, Lyne said he preferred to make no comment about the case.

What follows is based on Coughlan’s account.

Kavanagh, Joyce, Yeats and Beckett

Named after Ireland’s best-known literary figures, Kavanagh, Joyce, Yeats and Beckett, the four Atkins Hall apartment blocks on Lee Road, Sunday’s Well, Cork were run down and in receivership when Coughlan and Lyne purchased them in 2013 for redevelopment. 

It appears to have been the first time they did business together. Coughlan, a civil engineer and property developer, was under some financial pressure at the time and needed a partner to fund the revamp of the complex. Funding was hard to come by in the wake of the crash, and the project was complicated due to existing fire safety issues and roofing defects. Built as a lunatic asylum at the end of the famine, the former psychiatric hospital, in the gothic style, is a listed building. 

Coughlan says he approached Lyne, whom he knew personally, to join him in the project. The hotelier supplied 50 per cent of the €650,000 plus Vat necessary to buy Atkins Hall and thereafter became a silent partner until 2020, according to Coughlan.

Only 20 apartments were occupied at the time of purchase, generating approximately €20,000 per month. None was in compliance with the building regulations of the time. 

Coughlan says he was forced to fund the initial redevelopment works from his own money with help from family members and employees. He project-managed the refurb while his father Donal Coughlan carried out plastering works.

Later, Finance Ireland came in as a secured lender allowing for significant fireproofing, remedial and upgrade works to take place in the common areas and in 55 of the apartments. These were carried out by Coughlan’s father’s company Coolmore Property Developments.

A management company, Greendora, was set up.

The €6 million distribution

From 2014 to 2019, company monies were used to discharge liabilities owed by companies involved in the development. Coughlan says all the funds were paid back. 

On November 29, 2019, IIF struck a deal to sell the Beckett block of flats to Cork company Holren Properties Ahall for €6 million. According to Coughlan, work on ten of the 34 apartments was not finished and €568,388 was set aside in funding for their completion.

The final bill from Coolmore for rebuilding and fully furnishing the block was €3.25 million, representing “exceptional value” according to Coughlan. The sum is said to include: the Holren deferred payment of €568,388; capex since May 2019 of €437,437; the Finance Ireland repayment of over €1.5 million; arrangement fees and further capex of €539,793.

The shareholders were said to each have been paid a dividend of €1 million out of the proceeds of the Beckett sale.

According to Coughlan, the relationship between the parties began to deteriorate when Riobard Lyne began showing more interest in the business, around early 2020 at the beginning of the pandemic. Lyne was appointed as a director in April 2020. Coughlan says by this time their €650,000 investment, funded by Finance Ireland, was valued at €20 million, with all loans guaranteed by him personally.

On seeing the company accounts, Lyne is said to have made allegations of fraud and theft in respect of the €6 million distribution and threatened to call the garda fraud squad. Coughlan says the allegations are baseless and no company monies were unaccounted for. The nub of the Lyne allegations appears to be that IIF funds were either unexplainedly missing or had been used to discharge third-party bills.

Separately, Coughlan accused Lyne and another director of retaining, on behalf of the company, a percentage of rental income that he claims was due to a management firm controlled by him. He claims Lyne has sought to take full control of the financial resources of the company since his appointment as a director. Decisions were allegedly made without participation from Tom Coughlan or his father, company director Donal Coughlan, including changing the locks on development apartments and the company’s address from Cork to Rathmines, Dublin.

“Scurrilous and baseless”

While relations began to sour in 2020, tensions appear to have come to a head at an EGM called by Coughlan for May 11 at the Maldron Hotel in South Mall, Cork.

It was rescheduled for May 19 due to one of the directors suffering a bereavement.

The EGM was seeking to appoint two new directors: Aidan Murphy, a former executive at C&C and Fyffes and a one-time chair of Bus Éireann; and Heneghan PR consultant and former business editor with The Irish Examiner Conor Keane. The appointments were sought by Coughlan, who believed there was an imbalance in the composition of the board of the company against his interests.

In the run-up to the meeting, Lyne sought information about the nominees. 

Then, on the morning of the 19th, an email from Lyne’s address alleged proxy forms accompanying the EGM notice appeared to contain the forged signature of UGP director Donal Coughlan, Tom Coughlan’s father. A report from a handwriting expert who compared various samples of the director’s signature cast heavy doubt as to its authenticity, the court was told. On this basis, Lyne allegedly argued that the EGM was not properly convened. 

The email also expressed concern that employees of Tom Coughlan-related companies were put under severe pressure to do things that were not above board like signing a third party signature. It states: “Tom Coughlan was disqualified as a director yet he is the de facto/shadow director and ultimate beneficial owner of Urban Green Private and other companies that owe substantial monies to IIF Ltd. Money that was not authorised.” It states that while the resolution to appoint new directors is important, it is not time-sensitive, adding that the EGM can be reconvened correctly when the signature issue is adequately dealt with.

A UGPL representative replied to Lyne that the claims made in the email were “scurrilous and baseless”. He was accused of trying to obstruct the EGM which was adjourned to the Kingsley Hotel in Cork the following week. Lyne and Lordan were allegedly told if they did not attend the subsequent meeting within its first half hour, it would be deemed quorate and business would proceed in their absence. Coughlan says he even arranged to get the proxy-related documents re-signed by Donal Coughlan in the presence of a solicitor to avoid any further dispute.

The EGM went ahead remotely on May 27. Lyne allegedly blocked the appointment of the two directors, without giving reasons and said the meeting was at a stalemate. Unable to agree, the EGM was over in minutes. 

Calling time

With his attempts to influence the management of the company seemingly frustrated, Coughlan chose to go down the legal route, seeking to wind up the solvent property development venture due to a breakdown in trust and confidence between the shareholders. UGPL lined up Nicholas O’Dwyer of Grant Thornton to act as liquidator.

Eversheds Sutherland wrote to Lyne on July 4, flagging up the proposed wind-up application.

In a reply on July 11, Lyne indicated he was opposed to the liquidation, suggesting instead he would be open to a division of IIF’s assets.

The email also makes a number of allegations, which Coughlan says are completely unfounded. For one, the Cork developer is accused of showing no interest in the running of IIF, apart from “illegally” trying to appoint directors. UGPL is said to have declined countless invitations to weekly meetings and AGMs over the previous two and a half years. More seriously, firms owned by Coughlan are accused of taking over €2.1 million in unauthorised company borrowings.

“Tom and I know each other for over 25 years and had a very good friendship but while this has changed I am very well able to be very reasonable in relation to settlement talks etc in relation to the return of the unauthorised money to the company. Your client has not engaged to resolve this monetary situation in any shape or form. I have already shown a lot of patience and calm by not going to the relevant authorities when this matter first came to my attention,” the email states.

According to the financial statements lodged by IIF to the CRO for 2019 and 2020, the company provided the money as working capital to UGPL. 

Elsewhere the Lyne email says prior to the hotelier’s appointment as a director of IIF in September 2020 the company had a “pile of debts” and was about to receive a strike-off notice for the non-filing of accounts for three years. Having allegedly turned that position around, the present day-to-day running of the company is described as “very solid and calm” with “no trust or relationship issues”. It notes Coughlan’s restriction as a director and ends with Lyne saying he wants the operation of IIF to be an open book.

Lyne and the other directors of the company have called the company’s AGM for August 12. But Coughlan says he doesn’t believe the meeting has any prospect of resolving the “irreparable breakdown” in the relationship between the members. From his perspective, a clean break by putting a spike in the company is the most apt solution.