Company claims 1 million euros in losses after buying software company

0

A WAREHOUSE management systems and software company that acquired a software company says it was not disclosed before the sale that one of the company’s biggest customers would be terminating its contract.

Rincipal Systems (Holdings) Ltd is suing John Brennan and Mark Greene, and two of their companies, alleging negligent misrepresentation and misrepresentation relating to the 2020 share purchase agreement.

The commercial court heard that the share purchase was worth 5.5 million euros and Principal (Holdings) is claiming just over a million euros in losses in its action.

The case is against Mr Brennan, of Campbell Court, Cairns Hill, Slgo, and his company Ithania Investments Ltd, who together won nearly 66% of the share purchase deal. The other defendants, Mr Greene of Willbrook Lawn, Rathfarnham, Dublin, and his company Yranna Investments Ltd, hold just under 24 pc.

Mr. Brennan and Mr. Greene are former directors of PLT Data Systems Ltd and Principal Distributions Systems Ltd, the companies that were sold in the December 2020 share sale. Mr. Brennan was the founder and Mr. Greene the CFO.

Brian Connolly, director and accountant of Principal (Holdings), testified in an affidavit that in connection with the share sale, the defendants guaranteed to Principal (Holdings) that no customer of the firm had informed that he would terminate contracts.

Mr Connolly, however, said that Testerworld Ltd, one of the company’s biggest customers providing software licensing and management agreement, had announced that it would end its contract in the weeks before the contract was concluded. share purchase agreement.

In a reply affidavit, Mr. Brennan, on behalf of all defendants, disputed the amount claimed by Principal in his action and said he did not meet the €1 million threshold to clear the case. to be placed on the fast-track trade list.

He also said that if Principal had correctly identified and clarified the basis on which he calculated his alleged losses, it would have given the defendants time to engage and possibly resolve the issue through mediation or direct negotiation.

Instead, he said, Principal had been evasive and launched his legal proceedings “hastily without giving the defendants a proper opportunity to understand the matter with which they were charged.”

A request by Marcus Dowling SC, for Principal (Holdings), to admit the matter to the trade list on Monday was opposed by Garret Flynn, for the defendants. Mr Flynn objected on the grounds of the delay in bringing the case and because he said he did not meet the €1m threshold.

Judge Denis McDonald admitted the case to the docket.

He said he had to approach the request for admission to the list based on the existence of a credible assertion that the value of the case met the threshold of 1 million euros.

The underlying transaction was largely a commercial matter, he said. Listing on the trade list did not preclude parties from seeking mediation or other form of dispute resolution.

The case returns in November.

Share.

Comments are closed.