RECLUSIVE PROPERTY DEVELOPER Paddy McKillen has told the High Court in London that two billionaire brothers acted ‘dishonourably and unlawfully’ in trying to win control of some of London’s most luxurious hotels.
McKillen, who has previously been involved in Supreme Court action against NAMA in Ireland, accuses Sir David and Sir Frederick Barclay of making payments to the wife of fallen Irish developer Derek Quinlan.
The Barclays acknowledge the payments, the Guardian reports, but insist that the payments – made after Quinlan’s empire collapsed following the Irish banking crisis – were helping his family “at their time of need” and were unrelated to their business affairs.
Quinlan had led a syndicate which had taken control of Coroin, which owns the five-star Connaught, Claridge’s and Berkeley hotels, using loans from Irish banks in 2004.
McKillen and the Barclays, twin brothers who also own the Ritz Hotel and the Daily Telegraph newspaper, were also investors in the group.
Quinlan’s debts were later taken over by NAMA, and last September were taken over by the Barclays in a deal worth €800 million to Ireland’s bad bank.
The Financial Times explains how McKillen told the court he had “pre-emption rights” to buy Quinlan’s shares if they were ever put up for sale – and suggested that the payments to Quinlan’s family were an unlawful way of encouraging Quinlan to allow the Barclays take over his stake.
The Daily Telegraph itself reports that the allegation was refuted by the Barclays’ barrister, who told the court: “Mr McKillen thought if he threw enough mud at my clients they might be prepared to settle. The truth is it is Mr McKillen who has behaved badly.”
The brothers further argue that McKillen was simply priced out of the battle for the chain, saying McKillen wanted to be the shareholder in a company worth nearly £1 billion but did not have the cash to back up his interest.
The case is likely to continue for several weeks.
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