The Bank of Ireland is in a legal dispute with Ailmount Limited, a company managed by ex-shareholders of Davy, the brokerage firm it acquired in 2022 for €427 million. The bank is contemplating withholding approximately €15 million associated with prior legal actions against Davy and has initiated legal proceedings against Ailmount Limited, now owned by around 700 of Davy’s former shareholders. The Bank of Ireland asserts its right to do so under the indemnity clauses in the 2022 purchase agreement. Dentons is representing Ailmount while A&L Goodbody represents the Bank of Ireland.
This dispute marks the second legal wrangle between Ailmount and the Bank of Ireland stemming from the acquisition. A year ago, Ailmount accused the Bank of Ireland of failing to fulfil a payment of about €20 million due as part of the takeover. The case is ongoing.
The Bank of Ireland was required to reveal additional information relating to the sale in February. Ailmount is striving, via its attorneys, to amalgamate the new proceedings with the ongoing case. It’s as yet uncertain which precise claims will be contested in relation to indemnity.
The selling of Davy was triggered by a conflict—later resolved—with property developer Patrick Kearney, involving his over €5 million investment in Anglo Irish Bank bonds. In this deal, 16 Davy employees, inclusive of senior leaders, formed a consortium to purchase a bond from Kearney, though not disclosing their buyer’s identity. They then resold the bonds for a profit, leading to a €4.1 million fine by the Central Bank of Ireland after it was found that the firm had violated market rules. This occurrence resulted in the Bank of Ireland’s purchase of Davy in 2022, with several top management enjoying considerable profits from stock sales. However, disputes have arisen post-acquisition regarding the share purchase agreement’s different components.
Ailmount’s shareholders include around 720 investors, with notable stakeholders like Brian McKiernan, Davy’s ex-CEO, and senior managers like Barry Nangle and Kyran McLaughlin. Interestingly, about 300 of its shareholders are now employees of the Bank of Ireland following the acquisition.