Many years back, when I was starting my life in the legal world, I remember dealing, on behalf of two British couples, with two Spanish-Venezuelan property developing brothers who had a smallish urbanization on the side of the motorway in Calahonda, Mijas. On carrying the due diligence, I noted that they were not using any form of limited liability company, just a civil partnership (in Spanish it refers to business!), which meant that they were personally and directly answerable for any wrong doing. As it was the first time I had come across such audacious business set up, I asked them why did they not use a regular company, to which the answer was even more brazen: “because we are the only property developers who have cojones in the Costa del Sol, and will never hide, cheat or run away”.
The above came to my mind upon receiving a few enquiries on MRI (Macanthony Realty Investments) failed investments, two particularly relating to undelivered (yet paid) furniture packages on holiday homes by a company linked to the one above. I decided to investigate further, and, thanks to the ever expanding power of internet, came across several illogical pieces of content (videos, press releases etc.), in what appears to be a very determined but futile attempt to saturate Google first page. A few were relating to Peterborough United, under the very appropriate name of “Darragh Macanthony is part of the furniture”. Another was a video showing some nerds trying to salvage a chair from the powerful drag of a mighty electromagnetic MRI scan (after perhaps having swallowed the rest of the furniture packages promised by MRI, in what could be the only furniture-gobbling black hole ever to be discovered!).
I then went to read some of the -literally- hundreds of comments on threads opened to deal with the matter on various websites and blog posts (some being platforms for affected victims) that said that Macanthony, being part of the furniture, had also disappeared with it and of course the money. Before this happened, someone within the company must have been appointed to deal with the furious posters, as London law firm Carter Ruck has been on their cases, sending letters with notice of legal action.
Before I provide my opinion on what I believe may be the legal position of the victims, if we were to apply Spanish laws, I do have to admire Darragh Macanthony’s braveness in putting his own name to each one of the companies he set up in his few good years of glory, because, by doing this, he has seriously jeopardized the protection limited liability companies give to shareholders by precisely saying that the companies are him and he is his companies, and at the same time leading people to think that he might have set up all these companies to prevent legitimate plaintiffs from accessing his personal wealth to obtain legal remedies.
The doctrine of the lifting of the veil, originated in the US, has kept legal writers, scholars, judges and lawyers very busy for very long, but as far as Spain is concerned, the Supreme Court has established in numerous occasions that, if the existence of a limited liability company is simply an external form that does not imply a real separation of assets because it is merely a commercial format given to the activities of one individual (or a few), and thus it cannot be established that one is acting in the name of another person (a juridical person, in this case) but acting on behalf of oneself, then there is one single economic and financial reality.
I am always intent on not boring my readers but the Supreme Court has prevalence here, because it could well be the case the Mr. Darragh Macanthony is personally responsible, with his present and future assets, inclusive of his Peterborough Football Club, if a court of justice ever determines he has used his protective corporate shield to defraud legitimate expectations of people who contracted with one of his companies, all the while protecting himself.
These are some general notions alluded by the Supreme Court to establish when company owners should be stripped naked of the company protection:
- Abuse of rights, which happens when one takes to the last consequences the juridical or corporate personality, when this official intention does not correspond to reality but to a socially and ethically reproachable activity.
- Antisocial use of companies, which happens when, by use of the protection dispensed by using a company, one frustrates the expectations of bona fide clients whose rights are irreparably harmed.
- Artificial creation of multiple companies, all owned by the same person, to obtain a result contrary to law, pure fictitious entity, inconsistency of the juridical person, decoupling of one person into several companies, instrumentation, confusion of personal and juridical personalities, substantial confusion and identity, single economic unit etc.
- Decapitalisation of the companies.
- Facade or vehicle to allow someone to walk away with impunity from massive monetary damage inflicted to a numerous group of bona fide persons by willful misconduct, fault or negligence.
- Company being the “alter ego” of the main shareholder.
All the above pertains to civil actions that may be available, but what about a criminal edge? This is always more difficult to prove, but already some colleagues have pointed out that failure to deliver furniture could be seen as a form of “criminalized juridical contracts”, a subtype of swindle which applies to people who, knowing that they will not be able to comply, enter into civil contracts and take money upfront, with the result of default and loss for the purchaser.
If it can be proven that MRI was taking on money for furniture package contracts when they were already defaulting on others due to financial inability, it would seem sensible for out-of-pocket MRI ex-clients to take this route.