Some cases arising from Dolphin Trust collapse settled

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Several legal actions brought arising out of the collapse of German property firm Dolphin Trust have been resolved, the Commercial Court has been told.

No details of the settlement agreements against some but not all of the defendants involved were given to the court.

Dolphin, allegedly founded by British-German businessman Charles Smethurst, had raised funds for investments in the development and renovation of listed buildings in Germany including apartments.

It is estimated that between €650m and €1bn was invested in the property group from investors in countries including the UK, Russia, South Korea, France and some €150m came from Irish investors.

Dolphin MUT 116 was the investment vehicle for pension investors while another Irish registered firm called Dolphin MUT 103 dealt with individual investors.

Shane McCarthy and Ian Barrett of KPMG were appointed joint liquidators over Dolphin MUT 116 in 2021 and Myles Kirby was appointed liquidator over MUT 103.

Following the wind up of Dolphin MUT 116, the liquidators’ claimed that their investigation found the German Property Group was in financial difficulty for a number of years and there were numerous warning signs of this.

They brought proceedings claiming that misrepresentations were made by several parties allegedly involved with Dolphin to brokers in relation to Dolphin Trust products.

They had sought damages against various defendants for alleged negligence, breach of contract and declarations including that they account for any gains made directly or indirectly from any breach of duty.

The allegations of wrongdoing have been denied.

On Friday John Lavelle Bl for Mr McCarthy and Mr Barrett told Mr Justice Denis McDonald that his clients had resolved their actions against several of the defendants sued by his clients.

Counsel said that the proceedings against the Estate of the late Mr Paul Dunne of Terenure, Dublin could be struck out.

It was claimed that Dunne, who died in October 2020, had been MD of a firm which administered funds provided by Dolphin MUT 116 through the German Property Group, previously called Dolphin Capital and Dolphin Trust.

It was alleged that he had acted as a shadow director of Dolphin MUT 116.

Counsel said that it had also been agreed that proceedings against other defendants could be adjourned generally.

Those defendants are Wealth Options Trust (WOTL) Ltd, a firm which Mr Dunne was MD of, a linked firm Wealth Options Capital (WOC) Ltd, company directors Brian Flynn, Lions Gate, Glenvar Park, Blackrock, Dublin and Eanna McCloskey of Silver Birch Close, Mullfarm Estate, Dunboyne, Co Meath,

The joint liquidators had claimed that Mr Flynn and Mr McCloskey were directors of WOTL and shareholders in WOC and Mr Dunne was MD of WOTL from 2004 until his death in 2020.

Counsel said that an application would be made to re-enter the proceedings against those parties, should the need arise.

Counsel said that proceedings against Mr Smethurst remain live before the court.

Mr Justice McDonald agreed to strike out the cases against the estate, and said that while he was prepared to adjourn generally the cases against the other parties, there was “no guarantee” that the court, if asked, would re-admit the actions to the fast-track Commercial Court list.

The judge noted that while Mr Smethurst, who is based in Germany, had not participated in previous hearings of the action, but has been in correspondence with the liquidator’s lawyers.

The case against him will be mentioned before the court later this year.

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