Former Partner Takes Desmond To Court
Leading Irish and U.K. promoter Denis Desmond is in another dispute with a former partner, as Eamonn McCann has taken him to court over what could be a multimillion-euro legal battle.
After a preliminary hearing in Dublin’s Commercial Court Nov. 2, the case was to be heard in full beginning Feb. 1.
McCann, a Belfast-based promoter, claims the MCD chief owes him euro 3.8 million ($5.56 million) as his profit share from a number of events between 2001 and 2006.
McCann also says he had become increasingly concerned about the manner in which Desmond dealt with profits from an alleged partnership between them and had arranged for a “forensic” examination of books and records, according to the Irish Times.
He alleges that at no stage had Desmond put a “realistic value” on the amount due and that Desmond failed to keep the income of the alleged partnership in a separate account. He says Desmond didn’t keep the accounts and income of the alleged partnership – or joint venture, as alleged by Desmond – as a separate account, but instead permitted those funds to be used by his MCD Productions company.
McCann also claims further monies received as sponsorship had been retained by another company controlled by Desmond’s Gaiety Investments and that Desmond initially placed obstacles in his way when he tried to gain access to the accounts.
The court heard and accepted that MCD had provided all the accounts to McMann’s representatives and had conducted itself with the utmost transparency.
Desmond says the money being claimed relates to a buyout deal he did with McCann in 2006 and the dispute relates to how the settlement should be calculated.
Irish papers are reporting that Desmond agreed to buy out McCann for 4.66 times the average annual net profits for the years 2003, 2004 and 2005, but the two former partners are at odds over how the net profit should be reached.
McCann and Desmond worked with each other for several years and established MCD, the country’s main music promotions company. The partnership broke down a number of years ago, and Desmond took full control of the business. McCann went on to set up Wonderland Promotions.
At the end of last year, Desmond avoided facing former financial partner Shane Reihill in court by agreeing to pay him euro 6 million for his 8 percent share in Gaiety Investments.
At the time, Desmond told Pollstar there was no dispute over the value of Reihill’s investment, which had been brokered by Price Waterhouse, but admitted that he and his former partner had disagreed over certain details.
His business relationship with Reihill looked to have been strained for some time. A year earlier, Reihill resigned as non-executive chairman of LN Gaiety Holdings, a joint venture between Gaiety Investments and Live Nation.