In 2023, Compass Catering Ireland Ltd, part of a global food services group, acquired CNB Investments Ltd, which held the entire share capital in Glanmore Foods Ltd. Glanmore provides pre-packaged hot and cold meals and snacks to around 450 schools in disadvantaged areas. The Department of Social Protection provides schools with the funds for the scheme. Glanmore MD, John Mooney, and his wife Jennifer, own CNB which is registered in Raheen, Rathcoffey, Naas, Co Kildare.
Compass is seeking damages for breach of contract under the share purchase agreement as well as, or alternatively, damages for deceit, fraudulent or negligent misrepresentation and restitution for alleged unjust enrichment.
It also seeks, if necessary, an injunction preventing CNB from reducing its assets below €25m, or cash below €10m, pending resolution of the proceedings. The claims are denied.
On Monday, Mr Justice Mark Sanfey admitted the case to the fast-track Commercial Court on the application of Joe Jeffers SC, for Compass, with the consent of Brian Conroy SC, for the defendant. The case comes back next month.
In 2023, Compass paid €54.8m for the business. Compass announced that Blanchardstown-based Glanmore would retain its current management team.
As part of the pre-purchase due diligence process, Compass says CNB provided information showing that turnover as of December 2022 was €10m and net profit €1.3m. However, during a transitional management meeting in September 2023, Compass said it became apparent that “certain financial irregularities” had arisen about the charging of schools for hot meals.
Compass says it became clear there was previously an undisclosed problem with Glenmore’s billing system where it automatically charged participating schools for hot meals even though a child had chosen only snacks.
Compass claims a conscious decision was made by Glanmore only to refund schools which raised concerns rather than correct the invoicing model and inform other affected schools.
It says an internal review calculated total overcharges of at least some €734,000. Compass says it would not have agreed to buy the business if it had known about this and that it was worth “significantly less” than it was worth.
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