Two directors of a group of Irish e-learning companies are being sued in the High Court by a UK investment firm for allegedly concealing â¬ 450,000 VAT before the UK company loaned some â¬ 6.75 million to the group.
London-based Columbia Lake Partners Growth Lending (Luxco) SARL is suing James Egan and Adrian Murphy, directors of Dublin-based Shaw Education Group (SEG) plc.
Columbia loaned the â¬ 6.75 million to SEG which was guaranteed by two SEG subsidiaries.
In January 2019, Columbia issued a payment request of approximately 5.5 million euros. A week later, SEG and two associated companies filed for High Court protection which was granted.
In April 2019, a survival plan for the group was approved by the court. Under its terms, Columbia was only paid 1.2 million euros, which meant that Columbia suffered a significant loss.
In what Judge Brian O’Moore described Friday as “an unusual case,” Columbia then sued Messrs. Egan and Murphy, alleging that she learned that in December 2018 one of the subsidiaries, Shaw Academy Ltd, was subject to VAT. of â¬ 450,000 that he says was hidden in Columbia by the two directors.
Directors, he said, said the subsidiary was not subject to VAT. If they had not done so, Columbia says it would not have entered into the loan agreements in the first place or would have provided funds on different terms.
He also would not have exercised debt forbearance or taken steps to recover the funds, he said.
In a full defense, the administrators deny much of the claim. They also argue that the Columbia action is, among other things, an abuse of process and an attempt to circumvent the consequences of the April 2019 survival plan and debt cancellation.
Columbia, in pre-trial proceedings, asked the court to uncover certain documents relating to alleged hidden VAT liability. Following discussions between the parties, a number of issues were agreed upon before the case was heard.
Judge O’Moore issued instructions on a number of outstanding issues and ordered the discovery of certain documents by the defendants on Friday. The main action has yet to be heard.