Belfast Telegraph

Sunday 28 December 2014

Brothers who built business empire have bitter private rift exposed in ‘secret’ court judgment

Dispute: Businessman Michael Lagan
Dispute: Businessman Michael Lagan
Dispute: Businessman Kevin Lagan

They transformed their father’s quarrying firm into a sprawling, multi-million pound empire with interests in civil engineering, construction, waste management and other areas.

Now sibling millionaires Kevin (62) and Michael Lagan (56) have been thrust into the limelight as their serious private rift becomes public.

Their two separate business entities with turnovers of more than £100m each have emerged from a bitter legal battle which was eventually settled out of court — but a formerly confidential judgment from 2008 has now been published, exposing the bitterness and mistrust between the brothers.

In his judgment Justice McCloskey said the pair were embroiled in “a conflict of increasing proportions” from 2001 onwards.

However, any conflict was played down by the pair in a joint statement on Thursday.

“This is very much a historical matter and relates to a succession planning issue which arose some four years ago.

“In 2008, acting in the best interests of the Lagan businesses, we entered a process of negotiation and discussion through the Chancery Court.

“The issue was subsequently resolved by agreement to separate certain Lagan companies, the smooth transition of which was completed in 2010.

“We continue to work closely on areas of mutual interest while leading our individual businesses through this challenging economic climate.”

Michael’s Lagan Construction Group now employs 386 people and has a turnover of £154m, while Kevin’s Lagan Group Holdings employs 370 people and had a turnover of £118.1m for the nine months to December 2010.

While it was at least partly a pragmatic move to make matters simpler for the younger generation, others believe a persistent chill between the brothers is to blame for the rift.

The judgment of Justice McCloskey referred to constant suspicion between the two and accusations from one that the other was trying to exclude him.

But one observer said the break up was “no shock to the business world”.

“They have very different personalities.”

Older brother Kevin is painted as the quieter of the two with Michael the more sociable and chatty.

Despite gracing Rich Lists for many years, the brothers have had a low-key way of life, though they have been known to enjoy art and skiing.

“They have a secluded lifestyle which would nonetheless be high quality,” said an associate.

“Overall, you could say they have a high standard of living in a modest way.”

Dr Colm Murphy, who compiles The Sunday Times Irish Rich List, said the brothers have been a regular feature, for the past 16 years.

He said: “The Lagan quarrying assets were reckoned to have a potential sale price in excess of £200m at the height of the property boom and represented around a quarter of their business.

“This propelled them up the Rich List.

“But they have fallen hugely since with the construction and property collapse and the whole business is probably only worth £200m, the net asset figure of their accounts in 2010.”

They live in relatively modest properties in Belfast, though Michael recently invested in a country pile and its surrounding estate at Florida Manor in Killinchy, Co Down — described as “absolutely breathtaking” by one nearby resident.

But the greatest admiration has been reserved for how the brothers have created wealth and jobs for others through their firms.

“They are certainly hard workers and no-nonsense people,” said another acquaintance.

Yet despite sharing a strong work ethic, it seems a “strained personal relationship” persisted — though perhaps that’s inevitable when two brothers do business together for over 40 years.

“There is a very long history of acrimony,” said another associate.

A recent drama at UTV which resulted in Kevin resigning as a senior independent director in a display of support for his friend John B McGuckian, who was removed as chairman of the media company, was a rare foray into the public eye for the older brother.

Background

Family dramas have divided and arguably enlivened many companies. A rift between the Co Down house building Fraser brothers Alan and Bill led to one setting up Fraser Homes and the other, Fraser Houses, in the early 1980s. But splitting up their family business created further problems with ensuing court battles. And according to one observer “they fell out irretrievably”. Rival Belfast cab companies Value Cabs and FonaCab belong to cousins William McCausland and Stephen McCausland respectively. Sportswear firms Adidas and Puma were founded by brothers Adi and Rudolf Dassler in Germany in the 1940s. They fell out and never reconciled.

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