Belfast-born property investor Paddy McKillen has claimed members of the Qatari royal family have cheated him out of “tens of millions of dollars” in fees on work carried out transforming the Maybourne Beverly Hills hotel in Los Angeles into a “world-class establishment” over the past two years.
The lawsuit, filed by Mr McKillen’s Hume Street Management Consultants (HSMC) company with the superior court of the state of California for the county of Los Angeles this week, is one of a number of disputes between the businessman and the Qataris.
Mr McKillen also claims he is owed billions of pounds under a profit-share agreement struck with the Qataris in 2015, when they took over his then 36 per cent interest in the Maybourne Hotel Group, owner of the luxury Claridge’s, the Connaught and the Berkeley hotels in London. HSMC’s lucrative seven-year contract to manage and redevelop the London portfolio ended last April.
Separately, HSMC launched legal proceedings in France in recent weeks, claiming €19.6 million of unpaid project management fees in relation to the Maybourne Riviera, formerly the Vista Palace, overlooking Monaco and the Mediterranean Sea.
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Mr McKillen’s US proceedings name Sheikh Hamad bin Khalifa al-Thani, owner of the Maybourne Beverly Hills and former ruler of the autocratic Qatari regime that is hosting the World Cup, his daughter Sheikha Lulwah Bint Hamad Bin Khalifa al-Thani and a number of Maybourne companies as defendants.
The businessman alleges he was contacted during the summer of 2019 by a representative of Sheikh Hamad bin Khalifa and Sheikha Lulwah about the former Qatari emir’s interest in buying the property then known as Montage Beverly Hills.
Shortly afterwards, Mr McKillen discussed the project with the two royals on the sheikh’s yacht off the coast of Doha and he agreed to lead a team in managing and strategically redeveloping the hotel, the documents claim.
HSMC began taking responsibility for the management of the hotel when the purchase was completed in December 2019 and Mr McKillen’s company oversaw “a significant redesign and redevelopment of the rooms and the building, and expanded the hotel’s dining and beverage spaces, while also keeping the hotel operating”.
Mr McKillen said that while representatives for the Qatari royals “used the Covid-19 pandemic to justify delaying conversations about the particulars of plaintiff’s fees”, he nevertheless “trusted the assurances of fair compensation based” on his previous relationship with them.
The Qatari royals “clearly and unambiguously promised to plaintiff that it would be compensated for its services related to the Maybourne Beverly Hills”, the court documents said.
While Mr McKillen alleges the defendants reimbursed construction and other so-called hard costs as the redevelopment was in progress – “though often in an untimely fashion” – he failed to recover management fees, despite a number of attempts to do so through representatives and directly to the former Qatari ruler and his daughter.
HSMC provided invoices for $6 million (€5.6 million) in hotel management fees and $12 million in project management fees for work on the Maybourne Beverly Hills in 2020 and 2021. However, Mr McKillen claims that work carried out would warrant “tens of millions of dollars” of fees.
Mr McKillen said he wrote a letter to Sheikh Hamad bin Khalifa in November 2021, detailing the work his team had performed and demanding payment of fees. However, he claims he only received a response thanking him “personally for all your efforts and hard work over the past seven years in developing and managing the Maybourne Group’s hotels”. It did not address the issue of fees.
The Qataris’ takeover of the Maybourne in 2015 also saw David and Frederick Barclay sell their 64 per cent stake – ending a drawn-out battle between the billionaire Barclay twins and Mr McKillen over the hotel group.
The wider Maybourne group is owned by Sheikh Hamad bin Khalifa and Qatar’s former prime minister Sheikh Hamad bin Jassim bin Jaber al-Thani.
