Tuesday, March 14, 2023

Fiachra Gallagher

An application by former Kerry Group CEO Denis Brosnan to enter summary judgment over a €425,000 bank debt which he claims his former son-in-law has a personal liability for has been refused by the High Court.

Mr Brosnan’s application for judgment against US-based G Geoffrey Cramer, who separated from Mr Brosnan’s daughter Aimee in 2020, will now have to go to a full hearing of the High Court.

Mr Brosnan claims he was entitled to an indemnity from Mr Cramer, a co-founder of the Delaware, USA recruitment tech company, Futures Group Inc over the €425,000 loan.

Mr Brosnan approached AIB in 2007 to provide loan funding for Futures. AIB, it was claimed, would not loan to a US company but was prepared to lend personally to Mr Brosnan as long as he acted as guarantor.

Mr Brosnan says he paid off the loan in 2020. He claims Mr Cramer now owes him some €484,000 plus continuing interest.

Mr Cramer says the loan was a company debt which he was not personally liable for.

Full hearing

On Tuesday, Mr Justice Garrett Simons found the asserted defence was credible and should go to a full plenary hearing.

This was not a straightforward case whereby a guarantor seeks an indemnity against a principal debtor, the judge said.

“Rather, the circumstances of the case are such that it is credible that the plaintiff (Brosnan) either expressly agreed or implicitly represented that he would not seek an indemnity against the defendant.

“The relevant circumstances include the close family relationship between the plaintiff and the defendant, and the blurring of the distinction between personal debt and the debt of the company”, he said.

Earlier, the judge said the proceedings take place against the backdrop of a wider dispute over the ownership of the Futures Group which is the subject of ongoing litigation in North Carolina, USA.

In 2008, Mr Cramer, a director and shareholder in Futures, married Ms Brosnan, who was secretary of the company.

Mr Brosnan was chairman of the firm from 2011 until his removal in March 2021.

Divorce proceedings

Ms Brosnan separated from Mr Cramer in 2020 and divorce proceedings in the US appear to have been stayed to await the outcome of other litigation between Mr Brosnan and Mr Cramer, the judge said.

Mr Brosnan invested significant amounts of money in the company since 2006, some of which were paid through what are known as a “convertible revolving promissory note”.

This 2006 promissory note was initially for a principal amount of US $800,000 which Mr Brosnan says was increased to US$1.5m in August 2009.

Mr Brosnan claims, in the US proceedings, that he is entitled to a majority shareholding on the basis of the promissory note.

In April 2021, Mr Brosnan’s lawyers asserted in a letter that he had loaned the company US$3,2m under an alleged oral agreement and that the loan would be repaid in a reasonable period of time when the company was able to stabilise its operations.

That letter appeared to have excluded the repayments made in respect of the AIB loans from the aggregate amount claimed against the company, the judge said.

This “change in position” occurred a matter of weeks prior to Mr Brosnan issuing a demand for payment against the defendant in May 2021, he said.

Mr Cramer, in opposing the summary judgment claim, said the fact that it took at least a decade between when Mr Brosnan paid off most of the AIB loan (between 2010 and 2012) was “entirely consistent” with an agreement that he (Brosnan) would not pursue Mr Cramer for the monies.

Mr Cramer said it was not in dispute that Mr Brosnan did not demand the monies until after his marriage to Aimee was in difficulty and when the board of directors of Futures had fallen out.

Mr Justice Simons concluded that Mr Cramer’s asserted defence was credible.

Against a backdrop which included a very close family relationship, it was entirely plausible that Mr Brosnan had either agreed or represented that he would not seek to recover the monies from the defendant personally, he said.

The judge adjourned the case to later this month for directions on how it should proceed and costs.

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