The wife of the late CapVest co-founder Randl Shure has asked a London court to compel the private equity business headed by Cavan financier Seamus FitzPatrick to provide information related to an initial €219m sale of the Mater Private in December 2017 by the group to confirm it was conducted in a “fair and business-like manner”.
he hospital business was sold again just five months later for an estimated €500m.
Allison McIntyre Shure, whose husband Randl died in 2011, is a trustee of the Shure Marital Trust. It controls 25pc of the shares in CapVest and benefits both her and their children. North Carolina-based lawyer Stuart Mills, also a current director at London-based CapVest, is also a trustee of the Shure Martial Trust and is named as a claimant in the case.
No allegations of wrongdoing have been made.
"As this is the subject of ongoing legal proceedings it wouldn’t be appropriate for us to comment," said a spokesperson for CapVest.
The Irish Independent revealed in January that Ms Shure and Mr Mills had initiated legal action against CapVest as trustees, but CapVest declined to comment at the time as to the specific details of the lawsuit. Mr FitzPatrick is also a co-founder of CapVest.
Court documents that have just become publicly available and seen by the Irish Independent confirm that the dispute has been sparked by reports of the €500m Mater Private sale in May 2018 to France’s InfraVia Capital Partners.
Just months earlier, in December 2017, the Bermuda-registered CapVest Equity Partners II, or Fund II, sold its remaining assets, comprising the Mater Private and Odlums owner Valeo Foods, to a newly-formed entity called CapVest Equity Partners II B, or Fund II-B. As part of that deal, the Mater Private was sold to Fund II-B for €219.3m, according to the claim.
Reports in late 2017 in the run-up to that sale noted that US private equity firm HarborVest Partners was buying out a number of shareholders in the CapVest Fund II.
Investors were being offered the chance to roll their interests over into a new vehicle, which would seek to maximise the value of the Mater and Valeo shareholdings. The new fund would continue to be managed by CapVest.
“The Trust is not and has never been an investor in Fund II-B,” explains the claim filed by Ms Shure and Mr Mills against CapVest. “Whilst the Trust was offered the opportunity to become an investor in Fund II-B, the claimants declined that opportunity based on the information provided to them by the defendants at the time. The claimants understand that other investors in Fund II, as well as other parties related to the defendants did, in fact, invest in Fund II-B.”
Following the second sale of the Mater Private in 2018, the trust has sought information from CapVest as to how the first sale of the Mater Private in 2017 was recommended.
“The claimants, having learned of the second sale, wished to understand better… whether the claimants had been provided with all relevant information at the time (including the same information as received by other shareholders) pertaining to the proposed sale of the Fund II remaining assets,” and “how the defendants identified potential buyers of the Fund II remaining assets, and the purpose for, and process by, which Fund II-B was established”.
The trustees contend that under the terms of an agreement reached with CapVest at the time the Shure Marital Trust was established, any member of the board and any shareholder is entitled to request and obtain information in “reasonable detail” about matters concerning CapVest and its respective operations.
“Since May 2019, the claimants have made numerous requests to the defendants for information and assurances regarding the processes and decisions adopted in relation to the Fund II remaining assets,” notes the claim filed by Ms Shure and Mr Mills.
It adds: “The claimants have sought to exercise their contractual rights to obtain and review information held by the defendants, to confirm that the first sale was conducted in a fair and business-like manner with due regard to the interests of the Trust and all other third-party investors in Fund II. However, the defendants have only provided very limited information in response.”
They claim that unless the High Court in London rules on the “true meaning” of a relevant clause in the letter of agreement finalised in 2012, “it is clear that the defendants will not provide the claimants with the information they seek”.
They add: “Accordingly, the claimants have been left with no alternative but to bring this claim in order to obtain such a ruling and to compel the defendants to provide the claimants with the information to which they are entitled.”