Financial advisor gets injunction halting efforts to force him out of company he founded

High Court reporters

An advisor and shareholder in financial services company has been granted interim High Court injunctions restraining the firm from taking any action in relation to his shares or his employment.

Michael Hoare (62), who set up Mentor Financial Services Ltd in 2002, claims that weeks after signing a shareholders agreement with five others to expand the business, the others began trying to make his position in the company untenable in order to force him to resign.

On Wednesday, Bernard Dunleavy, with Eoin Coffey, instructed by Clark Hill Solicitors, were granted interim ex parte injunctions requiring the other shareholders - Elizabeth Lavin, Darren Nolan, John Flynn, Daniel McKeown and Adam Penrose, as well as the company itself - to continue to pay Mr Hoare's salary pending resolution of the dispute or further order of the court.

The defendants are also restrained, pending further order, from taking any actions in relation to Hoare's one-sixth share of the firm and from communicating to third parties to the effect that he has ceased employment with Mentor.

In an affidavit, Hoare, from Ratoath in Co Meath, said Mentor generated modest revenues of around €300,000 before, on March 26th last, he signed a shareholders agreement with the five personal defendants.

Salaried employee

He said that in addition to being a shareholder, he was now also a salaried employee. He was willing to forego a considerable degree of equity in the firm because the defendants would introduce capital, additional expertise and a new line of leads, he said.

In the lead up to signing the agreement, Lavin gave Nolan full administrative access to everything in the company's commercial systems and which gave him (Nolan) considerable control over the systems, he said.

Nolan, he said, had been obliged to keep a low profile in connection with Mentor as he was on gardening leave from his previous firm, Howden/Finance Solutions, which meant he was prohibited from active in involvement in Mentor for the period of that leave.

Remote work

At a meeting with Lavin and Nolan on March 29th at the K Club, Nolan expressed concern about the security of Hoare's email and computer system as he remote worked from Spain, where he maintains a residence.

Hoare said this situation had been accepted without question before the shareholders agreement and the company IT provider confirmed his system was secure provided his laptop was in the EU, he said.

When he next travelled to Spain, about a week later, he found he was blocked out of the system. He found he was getting fewer enquiries and learned some of his longstanding clients had been receiving financial review invitations from another employee on the instruction of Nolan.

At another meeting, on April 2nd, also attended by another shareholder,John Flynn, Hoare said he was accused of having sent threatening emails to Nolan.

Hoare said while the language used in the emails was inappropriate, which he regretted, it was merely expressing his frustration and dissatisfaction with Nolan they were not intended as acts of violence.

Hoare said his emails had been reviewed as part of a due diligence process on behalf of businessman Shane Taggart who was looking to invest in Mentor. He said he knew nothing of this proposal which was a breach of shareholders’ obligations.

At another meeting on April 17th, he said Nolan and Lavin made it clear they wanted him out but he refused.

Salary

On May 1st, he did not receive his salary payment and his inquiries were met with responses that it was with the company solicitor.

He was told his access to service provider Aviva was to be blocked because he was no longer with Mentor and several clients were also told this, he said.

Over the May bank holiday weekend, he was contacted by gardaí to whom a complaint had been made to them about the "unlawful retention" of his company car. Gardaí accepted his explanation that it was part of a civil dispute, he said.

Granting the injunctive reliefs, Justice Brian Cregan said on the assumption that everything counsel had put before the court was true, it was "an extraordinary state of affair" for someone who worked for so many years in the company and in three weeks was being ousted and the gardaí called about his company car.

He said the case could come back next week.