Has Paddy the Legend Cosgrave, Reached the Summit???

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Paddy Cosgrave flew in Denis O’Brien jet but turned on billionaire mentor, lawsuit claims

 24th November 2021

Web Summit CEO Paddy Cosgrave used Denis O’Brien’s private jet to fly to Davos and the United States, but subsequently launched “a campaign of abuse” against the billionaire after his companies stopped sponsoring the tech event.

The explosive claim is made in a lawsuit initiated this week by a Web Summit co-founder against Mr Cosgrave, alleging shareholder oppression.

The case has been filed by RTÉ board member Daire Hickey, owner of a 7pc stake in the events firm via his company, Lazvisax Ltd.

He quit as a director of the Web Summit in 2019 due to a breakdown in relations with Mr Cosgrave.

Mr Hickey’s lawsuit is the latest development in an acrimonious falling out between Mr Cosgrave and the other two co-founders of the successful tech event.

It comes just over a fortnight after similar claims of oppression were made in a lawsuit by another co-founder, David Kelly, who owns 12pc of the business.

In his lawsuit, Mr Hickey, who runs a PR firm in New York, claims Mr Cosgrave has been running the Web Summit in a manner oppressive to his interests.

He alleges Mr Cosgrave, who owns more than 80pc of the business, engaged in a strategy to force him out and refused to comply with a profit-sharing agreement.

His lawsuit claims Mr Cosgrave damaged the Web Summit brand through “disreputable conduct” toward the Government, the IDA and Enterprise Ireland.

It is also alleged in the legal proceedings that Mr Cosgrave “conducted a campaign of abuse” against Denis O’Brien after the billionaire businessman’s companies stopped sponsoring the Web Summit.

In a legal filing, Mr Hickey claims Mr Cosgrave had a close relationship with Mr O’Brien, saw him as a mentor and would regularly recount advice he says he received from the telecoms mogul on how to manage negotiations and deal with the press.

Mr Hickey said Mr Cosgrave flew on Mr O’Brien’s jet to Davos in Switzerland and the United States, and also requested the jet to fly important technology figures from San Francisco to Dublin for a conference.

However, it is alleged Mr Cosgrave began regularly posting messages attacking the businessman’s reputation after forming the view Mr O’Brien was involved in supporting a rival event, the Dublin Tech Summit.

Other serious claims by Mr Hickey are likely to be aired in court next Monday when an application will be made for entry of the action on to the list of the High Court’s fast-track commercial wing.

Mr Cosgrave is set to fight the lawsuit, which is being taken against him, his firm Pro Roto Ltd and the company operating the Web Summit, Manders Terrace Ltd, by Mr Hickey’s Lazvisax Ltd.

In a statement, a Web Summit spokesperson said: “We reject the baseless claims contained in Daire Hickey’s opportunistic legal action and we note his wholly one-sided version of the circumstances surrounding his exit from Web Summit.”

The Hickey case is now likely to travel with two other linked legal actions, both of which are due back before the court next March.

One of these is the oppression lawsuit filed by Mr Kelly’s Graiguearidda Ltd against Mr Cosgrave, Pro Roto Ltd and Manders Terrace Ltd.

In that case, Mr Kelly alleges Mr Cosgrave used Web Summit resources “for the benefit of his private household” and engaged in bullying and harassment.

Mr Kelly also alleged Mr Cosgrave’s behaviour had “for many years” been “manipulative” and “threatening” and that their relationship had become “irremediably toxic”.

Lawyers for Manders Terrace have denied Mr Kelly’s complaints amount to oppression and say the proceedings will be vigorously defended.

The other legal action is a lawsuit filed in September by Manders Terrace Ltd against Mr Kelly for alleged breach of fiduciary duty, claiming it had lost $10m (€8.6m) as a result of him allegedly secretly setting up an investment fund to profit from the Web Summit’s success. Mr Kelly has denied those claims.

A related action has been filed by Manders Terrace against Mr Kelly and fund manager Patrick Murphy in San Francisco.

Mr Murphy is not being sued in the Irish action.

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