An agreement has been reached over a conflict involving Walls Construction shareholders in relation to an intended “growth share scheme”. The proposal from the construction firm, aimed to reward and promote new management, led to a legal case which was subsequently addressed through out-of-court mediation, as advised by Mr Justice Denis McDonald of the Commercial Court. They have now achieved a settlement, as confirmed by legal counsel this past Monday. However, implementation will require some time.
Walls Construction, an Irish company with a turnover of €472 million in 2022, defended its position asserting that the relevant shareholder and company permissions for the growth share scheme were secured. The strategy entails issuing growth shares, with no present rights, that correspond to 20% of WCHL until specific financial objectives are reached. The company maintains that it would afford future management a stake in the business, with economic rights activated upon hitting particular financial benchmarks.
However, McSorley Investments Limited, which possesses a 20% stake in Walls Construction Limited, contested the plan over supposed concerns that its interests would be undermined and minimised by the proposed scheme.
This investment entity was established a few years ago to house WCHL shares owned by the Wall family members. WCHL, founded in 1950 by PJ Walls, completely owns the shares in Walls Construction. WCHL reported a pre-tax profit of €18 million in 2022, having recently carried out a fit-out of Google’s Dublin Docklands offices in the old Boland’s Mills. They also acted as the management contractor for LinkedIn’s new head office at Wilton Place, Dublin 2.
Eugene O’Shea, the CEO of Walls Construction, conceded that the scheme was anticipated to gain approval over a month ago. However, necessary meetings were postponed. Before the reshuffled meeting could take place, McSorley Investments proceeded with a lawsuit against Mr O’Shea, WCHL and several board of directors.
The defendants maintained that their proposed scheme is perfectly aligned with a 2015 accord, outlining how WCHL should function and how investor-shareholder relations should be managed.
Nevertheless, McSorley Investments, through its legal filings, has articulated worries regarding the “high” quantity of shares set to be alloted, along with potential tax consequences of the scheme.
In a legally binding declaration made to the court, PJ Walls Jr, who happens to be the founder’s offspring as well as a director for both McSorley Investments and WCHL, claimed that the accused were unjustly and oppressively mandating a reduction in McSorley Investments’ equity stake. Upon learning the dispute had been resolved in court this Monday, Mr Justice McDonald extended his congratulations to all involved parties for their prompt settlement. To stay abreast with news and insightful commentary, consider subscribing to our Inside Politics Podcast and avail push notifications directly to your mobile. Lastly, you can keep up with The Irish Times through WhatsApp for the most recent updates.