PADDY McKILLEN’S involvement in the Maybourne hotels in London and his takeover battle for them with the Barclay brothers draws in some of the world’s richest people and well-known Irish business names.
His witness statement reveals rising tensions between the two sides in their fight for the hotels.
Describing his key role in assembling the investors to buy the four hotels in the Savoy Hotel Group for £750 million (€1.1 billion) in 2004, McKillen recalled how he had approached financier Dermot Desmond. In the Four Seasons in Dublin Desmond offered him a loan of £25 million but declined to invest himself.
After buying the hotels, McKillen and fellow investor Derek Quinlan met Saudi billionaire Prince Al-Waleed Bin Talal on his boat in Cannes in 2005 and shook hands on a deal to sell him the Savoy Hotel for £230 million. McKillen celebrated with Mr Quinlan and friends at the Carlton Hotel in Cannes.
Characterising his pivotal role in developing the other hotels – Claridge’s, the Berkeley and the Connaught – McKillen said designer John Rocha regularly held fashion shows in the hotels.
He also “subsidised” the stay of the governor of California to attract him and his contacts to Claridge’s on later visits.
After Quinlan hit trouble in 2009, McKillen sought investors to reduce the hotels’ £660 million debt and to stay out of Nama.
McKillen said that, since 2007, Quinlan had not paid his share on the running costs for the Clarence Hotel in Dublin, co-owned with Bono and The Edge of U2, and interest on a AIB loan on the hotel. He said Quinlan remained in default with AIB and owes his partners about €200,000.
Relations between McKillen and the Barclays, Quinlan’s preferred new investors, got off on the wrong foot. At a meeting in their Ritz Hotel in 2010, McKillen was introduced to Sir Frederick Barclay by a concierge but Barclay ignored him, asking the concierge why McKillen had been allowed in without a tie.
After the Barclays bought 25 per cent of the hotels in 2011, Sir Frederick told McKillen they planned to buy him out and that he had no long-term role.During their conversation, McKillen said he complained about Quinlan “having sat around on his ‘fat ass’ running up expensive hotel bills while I did the majority of the work in the hotels that had added value to his investment”.
McKillen later asked a mutual friend, Denis O’Brien, to try to change Quinlan’s mind on his proposed deal with the Barclays.
McKillen said a lawyer for the Qatari royal family told him that Quinlan had sought a $25 million fee to incentivise him to sell his shareholding to them.
The court heard McKillen had agreed a 50:50 deal with the Qataris to become partners in a takeover of the hotels. Now he has shown he can (with others) buy the hotels, McKillen must make the case that he should have been offered stakes held by Quinlan and other investors ahead of the Barclays
