Business

Ex tycoon’s nurse fights on for millions

A rugby and business legend with longstanding links to New Zealand is still being pursued in US courts by his former personal nurse for millions of dollars.

Former British & Irish Lions rugby star and billionaire Sir Tony O'Reilly now has to give evidence in a US court fight with his longtime nurse and assistant over her claim he reneged on a promise of US$40m in stock for her as compensation.

Ex Heinz boss O'Reilly, whose Independent News & Media once owned the New Zealand Herald and papers on four continents, declared bankruptcy in 2015 in the Bahamas and his trustee wants the US courts to stop the action by his former nurse of 16 years, Sabina Vidunas, which alleges a breach of his contract with her for the stock compensation. He argues the Bahamas bankruptcy applies also in America.

O'Reilly, aged 83, retired from heading H J Heinz worldwide as the highest paid CEO in America, became a billionaire and was Ireland's richest man. But he had a spectacular fall from financial grace when he lost control of his INM media empire to rival Irish billionaire Denis O'Brien and also lost vast sums in the collapse of the Waterford Wedgwood luxury goods firm. He has sold personal assets, including his stately Irish homes and the residence in the Bahamas and was pursued in legal cases over his art collection.

The contents of one of his Irish homes, Castlemartin in Kildare, Ireland, were sold in an auction at a country pub. Items included a stuffed tiger's head and a pair of console tables which sold for €145,000. A 24-seat mahogany dining table, at which, the Irish Times reported, O'Reilly had entertained Bill Clinton and Nelson Mandela, also sold for €30,000.

He lives now with wife and multi-millionairess Chryss, at a chateau at Deauville in France, reputedly built on the ruins of the castle where William the Conqueror plotted his 1066 invasion of England. She is a member of a family of Greek shipping magnates and was never a guarantor to his debts. According to Ireland's Sunday Independent his business and personal losses have not impacted on her "vast personal fortune".

The US Bankruptcy Court for the Western District of Pennsylvania has declared O'Reilly cannot claim that his Bahamas bankruptcy automatically applies in the US, because his "center of main interests does not lie in the Bahamas" but in France. Because no evidence was presented of "any operations or nontransitory economic activity in the Bahamas" the bankruptcy there would not be recognised for a lesser, "non-main" argument either.

The exclusive Lyford Gay gated resort where O'Reilly lived in the Bahamas. Photo: Sotheby's

Judge Jeffrey A Deller said: "The Bahamian Trustee has not offered any evidence in the form of familial ties or further occupational ties of Mr O'Reilly to the Bahamas form which this Court could infer that Mr O"Reilly has an intent to return to the Bahamas. 

"Rather the undisputed record is that not only does Mr O'Reilly reside with his wife in France, but it has also been suggested that Mr O'Reilly's health situation is such that he is not able to travel."

He gave the parties a chance to settle the dispute at mediation but when that failed he decided late last year to schedule a hearing in March in Pittsburgh for the trustee to argue in person why the Bahamas should be considered a 'non-main' centre for O'Reilly. The judge directed O'Reilly will have to give evidence.

O'Reilly's lawyer told the Pittsburgh court his client's ill health meant that in the past, depositions in the case were allowed to take place outside the US. (At one stage in earlier proceedings, a court was told O'Reilly was in France and too ill to attend. Vidunas' lawyer told the judge O"Reilly appeared to be suffering from 'litigationitis.")

Because of the collapse of mediation, Judge Deller said: I think the issue of the veracity of Mr O'Reilly's affidavit [about his interests in the Bahamas] is at issue. I don't think it would be appropriate for me to rule on the veracity and credibility issues without hearing live testimony."

He said a number of issues raised by Vidunas' lawyer about the O'Reilly affidavit "were well taken... and that should certainly put into perspective the work [the Bahamian trustee of O'Reilly's bankruptcy] needs to do to prove its case."

Vidunas first filed against O'Reilly in US Federa Court in 2013, two years after her employment as his personal nurse and assistant ended. She had been a constant figure beside O'Reilly as he travelled the world, including on visits to New Zealand when INM owned the Herald and other regional newspapers. She was with him when he brought INM's international advisory board to Auckland for the 2005 Lions tour, with celebrities such as actor Sean Connery, former Washington Post editor Ben Bradlee and a former UK Chancellor, Kenneth Clarke.

Vidunas says the Bahamian bankruptcy is different to the US system and if she joined that process she would be precluded from pursuing direct claims against O'Reilly. She believed there was little judicial oversight there over the trustee managing his affairs. Judge Deller, in an earlier judgment, disputed her belief she could not challenge the trustee.

But he sounded a warning to O'Reilly, quoting the 8th Century BC author Homer: "Observe due measure, for right timing is in all things the most important factor."

The judge said: "The Court makes this observation because Mr O'Reilly has moved his residence since the commencement of the Bahamian bankruptcy. His relocation may be outcome determinative depending upon the lens of time through which the Court must look."

The court will make its judgment on whether O'Reilly has 'non-main' interests in the Bahamas, and could yet qualify for US bankruptcy protection, taking its starting point as the date his trustee filed for that protection to head off Vidunas.

Judge Deller said the date was important. "Prompt action avoids the 'never never land' problem which can be occasioned by the shifting sands of where a debtor's domicile, principal place of business, and/or assets and liabilities are primarily located in the ensuing years subsequent to the commencement of a foreign insolvency proceeding."

He concluded: "Recognition of a foreign proceeding is by no means a rubber stamp exercise."

If Vidunas is successful in defeating O'Reilly's attempts to block her US action, she could then advance her original case for breach of contract over his failure to pay her the millions in compensation she says he promised.

O'Reilly was a star winger for the 1959 Lions on their tour of New Zealand and frequently caught up with New Zealand rugby legends on his trips to this country.

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