Larry Goodman linked company secures judgment for €7.89m against co-founder of  Blackrock Clinic

Mr Justice Michael Quinn had last May said he would grant judgment for some €19m to Breccia but, having taken into account factors including Breccia has received payments concerning shares of Dr Sheehan in Blackrock Hospital Ltd (BHL), he entered final judgment this week for some €7.89m.

The judge was making final orders following his judgment on the latest stage, referred to as Module 3, of marathon litigation concerning control of the clinic.

In the May judgment, Mr Justice Quinn dismissed a range of claims by Dr Sheehan, including Breccia had conspired with another clinic co-founder, Dr George Duffy, and others to damage Dr Sheehan's interests concerning purchase of loans made to buy shares in the clinic, and said he was granting a counterclaim by Breccia for judgment against Dr Sheehan.

He sought submissions before making final orders.

In a follow up judgment this week, he granted declarations that the purchase by Breccia of Dr Sheehan's loan facilities was lawful, valid and effective and that Breccia is entitled, pursuant to the mortgage, to appoint a receiver over and/or exercise the power of sale in relation to Dr Sheehan's shares in BHL.

Dealing with the judgment amount, he noted he had said in May he would grant judgment for some €19m on Breccia's counterclaim, comprising some €17.5m due under Dr Sheehan's loans and some €1.5m under a guarantee.

Breccia has pointed out its counsel had indicated at the hearing it was not pursuing the €1.5m amount and also said certain deductions should be made in the amount of the judgment to reflect payments received by Breccia.

The court had declared in its Module 1 judgment Breccia was entitled to receive dividends attributable to Dr Sheehan's shareholding in BHL and Breccia received dividends in December and February last totalling some €3.7m.

Breccia also received €10m from a receiver appointed by it over Dr Sheehan's shares in BHL. The receiver sold those shares to the Irish Agricultural Development Company (IADC) and the €10m represented an interim payment to Breccia pursuant to its security over those shares.

Breccia argued, in calculating the final judgment, credit should be given for the €10m payment, less €4.03 million "enforcement" costs, including legal and other professional fees, incurred by Breccia.

Dr Sheehan's submissions were confined to seeking a stay on any costs order, the judge noted.

Taking into account all adjustments to the judgment order, and stressing the €4.03m costs claimed by Breccia was only its estimate, the judge said he would grant judgment for €7.89m.

He ruled Breccia and the other defendants - IADC, Dr Duffy, his wife Rosaleen and Tullycorbett Ltd, a company controlled by Dr Duffy - were entitled to their costs of Module 3 against Dr Sheehan. BHL previously got its costs against Dr Sheehan.

The judge noted Dr Sheehan had said he wished to appeal the Module 3 judgment and wanted a stay on costs until the appeal was decided. He had also informed the court he has made a filing in a court in Illinois, US, under the US Bankruptcy Code and was "adhering to the worldwide stay as granted"

The defendants opposed any stay.

Having regard to his findings on Module 3, and Dr Sheehan's record of failing to comply with directions aimed at progressing his appeal on Module 1, the judge refused a stay on the order for costs on Module 3.

Other issues in the litigation have yet to be decided, including whether an alleged change of control of Breccia triggers the application of certain transfer provisions in the BHL shareholders agreement.