Paddy Cosgrave has refuted claims that he stepped down as CEO of Web Summit due to untenable conditions, according to statements heard in the High Court. Lawyers representing the co-founder communicated to the court that Cosgrave resigned in October, believing it to be in the firm’s best interests. Bernard Dunleavy, senior counsel, acknowledged on behalf of Cosgrave and Web Summit’s parent company, that the decision was influenced by a set of tweets he posted on the Israel-Hamas conflict, which had business implications.
In separate cases against the company and Cosgrave, Daire Hickey and David Kelly, co-founders of Web Summit, are demanding further disclosure of documents – alleging their rights as minority shareholders were oppressed. Hickey holds 7% shares while Kelly holds 12% in the company. Last December, they were permitted to add new allegations regarding Cosgrave’s social media posts following the attack on Israel by Hamas to their existing actions. A significant controversy stemmed from these posts, leading tech companies like Google, Meta, and Intel to withdraw from the November 2023 Web Summit conference.
This new contention will be firmly challenged along with the other allegations in the lawsuits, as informed to the court. The minority shareholders are pressing the court to enforce Web Summit and Cosgrave, who holds an 81% stake, to unveil certain categories of documents pertinent to the claimed repercussions of his posts – including internal responses to companies that backed out from the event.
They are also demanding access to specific records regarding Web Summit’s funding of the Ditch media organisation and their decision to stop funding subsequent to Cosgrave stepping down as CEO. They assert that posts by the Ditch concerning Israel were directly harmful to their technology events company. Ms Justice Eileen Roberts deferred her ruling on these applications.
Kelley Smith SC, representing Mr Hickey, pointed out that the respondents, Web Summit and Cosgrave, admitted only what’s already in the public eye and, in reality, it could not help but be admitted.
For instance, she remarked, the individuals in question accepted that certain tweets were posted by Mr Cosgrave, but they contest her client’s categorisation of these tweets as “provocative”, arguing these tweets should be interpreted with a broader public perspective. She highlighted the gap in admittance by saying it makes apparent “what is not being acknowledged”, and the unresolved issues are contributing to the exploitation her client is claiming. “The level of harm inflicted is unknown and obviously, without this knowledge, we can’t ascertain the loss we’ve incurred as a minority shareholder”, she put forth.
Mr Frank Kennedy, Mr Kelly’s barrister, concurred with a major part of her argument and claimed the documents his client is seeking are “pertinent”, “vital”, and “indisputably” related to the alleged damages and company’s worth. However, responding to the motions, Mr Dunleavy contested many of Ms Smith’s interpretations of his client’s acknowledgements and disputed the significance of the sought documents. He stated the certainty and content of the tweets are accepted, along with the agreement that these tweets instigated considerable negative press coverage and reproachment from particular tech business leaders. He could not refute that the issues had affected a substantial number of people.
To prove their allegations, minority shareholders have to demonstrate that the company membership was adversely impacted, according to Mr Dunleavy. This proof can be ascertained only by taking account of the financial consequences for the company, which were already addressed by their previous “extremely comprehensive” discovery enquiries. The petitioners are now requesting a broader scope “investigation rather than a concentrated investigation”, as he appealed to the court to reject these requests.
A series of lawsuits and counterclaims were filed among the three co-founders of Web Summit, including complaints of shareholder exploitation. Web Summit, in a case against Mr Kelly filed in September 2021, accuses him of fiduciary duty breaches, misrepresentation and usurping business opportunities. Apart from the allegations of shareholder oppression, Mr Kelly and Mr Hickey, via their shareholding bodies, as well as as individuals, have legally challenged Mr Cosgrave and Manders Terrace for an alleged violation of a profit-sharing agreement.