Paddy Cosgrave “used Web Summit resources for the benefit of his private home”, ex-director says in lawsuit
Paddy Cosgrave has used Web Summit resources “for the benefit of his private home” and engaged in intimidation and harassment, a former director has alleged in High Court proceedings.
In an affidavit, David Kelly cited emails from the company alleging that the Web Summit had arranged a locksmith for Cosgraves’ nanny and the potential supply of a new modem in a grandma’s apartment.
He also alleged that in 2019 the Web Summit website started selling clothes on behalf of Mr. Cosgrave’s wife, model Faye Dinsmore. These included a hand-knitted sweater for € 850 and a children’s hoodie for € 240.
The claims are being brought in a lawsuit brought by Mr. Kelly’s company, Graiguearidda Ltd, against Manders Terrace Ltd, the company behind Web Summit, Mr. Cosgrave and his company Proto Roto Limited, over oppression allegedly of Mr. Kelly as a minority shareholder.
The case was accepted on the High Court’s fast-track trade wing’s list today.
Judge Denis McDonald said there were “important business issues” involved.
In an affidavit in support of the case’s request for listing, Mr. Kelly alleged that Mr. Cosgrave’s behavior had been “for many years” “manipulative” and “threatening” .
“I have been the victim of bullying, harassment, abuse, coercion and intimidation. The relationship between us is now completely broken and can be described as hopelessly toxic, ”Kelly said.
His company has a 12% stake in the Web Summit, but Mr Kelly said that because of the way Cosgrave was running the company, his minority stake had been “effectively meaningless.”
Mr. Kelly alleged that Mr. Cosgrave “appeared to treat” the company “as an extension of himself” and did not meaningfully consult him as a shareholder or fellow director. He resigned from his post as director last March.
Bernard Dunleavy SC, for Manders Terrace Ltd, said his side had neither consented nor opposed the case being placed on the court list.
“I just want it to be clear. The decision not to oppose entry in no way reflects the defendant’s views on the merits of the case, ”said Dunleavy.
“We don’t believe that complaints that are exposed at length enough, taken at their height, constitute oppression. We intend to vigorously defend the procedure.
The lawsuit comes just weeks after Manders Terrace filed suit against Mr Kelly for alleged breach of fiduciary duty, claiming he lost $ 10million (€ 8.6million) as a result of his alleged secret creation of an investment fund to profit from the success of the Web Summit. . Mr. Kelly has denied these allegations.
The two cases now appear to be set to travel together and will be back in court next March.
In his affidavit, Mr. Kelly testified that he had known Mr. Cosgrave for 25 years. They had gone to high school together and he, Mr. Cosgrave, and Daire Hickey co-founded the Web Summit.
He said that in recent years their business relationship had been “seriously damaged as a direct result of Mr. Cosgrave’s conduct in the way he ran the business of the company.”
Among the allegations made in the affidavit, Mr. Cosgrave used company resources to carry out “toxic” campaigns and blood feuds against Leo Varadkar, Tánaiste’s friend Maitiú Ó Tuathail and IDA.
He alleged that a libel action taken by Dr Ó Tuathail over a slanderous tweet was “a prelude” to a “concerted campaign” to harm Dr Ó Tuathail.
The action was settled and Mr Cosgrave tweeted an apology in August of last year.
But Mr Kelly claimed that at that time Mr Cosgrave had started working with a former associate of Dr Ó Tuathail as well as an employee of Web Summit, in an attempt to discredit him.
The legal file highlighted Mr Cosgrave’s alleged involvement in revealing the story that Mr Varadkar disclosed a draft GP contract to Dr Ó Tuathail in April 2019, while he was still in negotiations. The leak is currently under investigation by Gardaí.
Village review said Mr Cosgrave had made no contribution to the published article revealing the leak. He claims to have published the article in accordance with ordinary journalistic ethics and on the basis of what he independently deemed relevant, fair and true.
In the affidavit, Mr Kelly alleged that a senior IDA executive was “humiliated” at a Web Summit event in New Orleans in 2018, where IDA sponsored a cocktail party for directors. over 200 companies.
He alleged that after a senior IDA official gave a welcoming speech, Mr Cosgrave stood beside his “slow applause” and later told the audience that this would be the last time. that IDA would be allowed to sponsor a Web Summit event.
Mr. Kelly asserted that the “entanglement” of Mr. Cosgrave’s affairs and those of Web Summit was not limited to financial or political matters.
“There are documented cases in which Mr. Cosgrave has used Web Summit resources to help him perform administrative tasks for the benefit of his private home,” he said.
Mr Kelly referred to emails from the company describing how a locksmith was purchased for the Cosgraves’ nanny and discussing the potential supply of a new modem in Grandma’s apartment.
He alleged that in 2019 the Web Summit website started selling clothes for his wife, Faye Dinsmore, including a hand-knitted sweater for € 850 and a children’s hoodie for € 240.
“The sale of such clothing has attracted negative publicity for Web Summit,” he said.
Mr Kelly raised the issue of a donation of € 1million for the Irish response to Covid-19.
He said on March 16, 2020, Mr Cosgrave tweeted that one aspect of the state’s response to the pandemic was “a catastrophic failure of planning.”
In response, HSE chief executive Paul Reid responded on Twitter, saying, “Throwing stones from the sideline is not helping anyone.
A day later, Mr. Cosgrave announced the donation of $ 1 million, which Mr. Kelly said was made without reference to other directors or senior executives at Web Summit.
“Mr. Cosgrave ran the business in a manner akin to that of a personal fiefdom, as if he owned it himself,” said Kelly.
Mr. Kelly alleged that he had faced a concerted campaign by Mr. Cosgrave to harm his “professional and commercial activities”.
He accused Mr. Cosgrave of fabricating lies about him in order to harm his personality.
This, he alleged, included Mr Cosgrave telling him that he had heard he passed a mutual friend at a wedding.
Text messages from the mutual friend, described in the affidavit, confirmed that nothing untoward had happened.
He said during a text exchange, Mr Cosgrave said he saw “kompromat” on Mr Kelly, a term used to describe compromising material.
He said it became apparent that this was a reference to photographs allegedly taken during his stag weekend.
“Mr. Cosgrave was not present this weekend and his reference to such photos is a fabrication,” Mr. Kelly said.
The case returns to court on March 14.