A co-founder of the Blackrock Clinic private hospital group has been disqualified from being a company director for 10 years amid claims of fraud.
he sanction has been imposed on US-based Dr Joe Sheehan (77) by the High Court, while his wife Norah (74) has also been disqualified for seven-and-a-half years.
The orders were made following an application by Myles Kirby, the liquidator of their company Blackrock Medical Partners (BMP).
In an affidavit, Mr Kirby said he had discovered transactions he believed to be “entirely improper and to constitute a fraud on the company and its creditors”. He identified six payments totalling €2.6m, made in January and February 2020, which he alleged were transferred to connected entities or persons, including relatives of Dr Sheehan.
The liquidator said he had been unable to find any record of any commercial legal basis for the payments and that it seemed to him they were made to put money out of the reach of creditors.
Neither Dr Sheehan nor his wife turned up in court to contest the application, although Dr Sheehan has previous insisted there was no illegality in the disbursement of funds.
The disqualification orders were made by Mr Justice Michael Quinn on Wednesday.
While the disqualifications were lengthy, the judge said he could not go to the “top of the scale” in the absence of definitive proof of fraud.
Dr Sheehan, who is based in Illinois, lost a long-running battle with beef baron Larry Goodman over control of the Irish hospital group.
BMP was set up in 2000 to develop the Galway Clinic in Doughiska and until 2020 it was a 25pc shareholder in Marpole, the Galway Clinic’s operating company.
As part of the battle, BMP sued Mr Goodman’s Parma Investments Ltd in 2016, but it lost the case and was subject to orders for costs. According to Mr Kirby, the costs were never paid. Parma secured a Mareva injunction freezing BMP’s assets in February 2020, citing fears the firm might remove assets. Parma then wound up BMP last year.
The liquidator, from the firm Kirby Healy Chartered Accountants, said his investigation found BMP received €3.25m from the sale of its shares in Marpole in January 2020 but the proceeds were dissipated by the time the Mareva injunction was granted.
He said he filed a report with the Office of the Director of Corporate Enforcement and that the watchdog agreed with his recommendation that disqualification proceedings were appropriate for all directors.
In an affidavit sworn in 2020, Dr Sheehan said there was neither illegality nor irregularity in the disbursement of the funds. He said it was entirely wrong to imply wrongdoing by him or the company and that he had no knowledge of the whereabouts of the funds now.
Dr Sheehan filed for Chapter 11 bankruptcy in Illinois two years ago. This form of bankruptcy involves the reorganisation of a debtor’s business affairs, debts, and assets.
Mr Kirby has filed a motion with a court there seeking leave to subpoena BMP’s directors to be examined by deposition under oath and to produce records relating to the impugned transactions.
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