PROPERTY DEVELOPER Paddy McKillen vowed to continue his fight with the billionaire Barclay brothers for control of three luxury London hotels, despite losing a £15 million court case against them yesterday.
The British high court ruled that Mr McKillen made allegations“of outright and sustained dishonesty” against financier Derek Quinlan and the two brothers, but had not come “anywhere near establishing them”.
Mr McKillen owns a stake in a luxury hotel group with Mr Quinlan and the Barclays. He took the action claiming the brothers had used “unlawful or unfairly prejudicial means” to deprive him of the opportunity to buy Mr Quinlan’s share.
Coroin, the company at the centre of the case, was set up by Mr Quinlan in 2004 to buy the Berkeley, Connaught, Claridge’s and the Savoy,which was later sold to repay debt.
Rejecting Mr McKillen’s case, Mr Justice David Richards said the Belfast-born businessman – who is now backed by the Qatari royal family – could not have afforded to buy Mr Quinlan’s stake in 2011. Investors who have come forward since had done so only in the hope that he would win the High Court action and force the Barclays to sell up, said the judge.
Despite the court defeat, Mr McKillen remained determined last night to continue fighting for control of the hotels and to buy out Mr Quinlan. It was only a matter of time before Mr Quinlan became bankrupt and his shareholding in the hotels had to be sold, he said.
“I am sitting, waiting on the inevitable,” said Mr McKillen, who has a 36 per cent stake in the hotels.
He added that the court confirmed he was entitled to first refusal on Mr Quinlan’s shares, which would give him a controlling shareholding in the hotels.Mr Quinlan still holds his 35.4 per cent share in Coroin, but companies owned by the Barclays have bought loans secured against this stake, giving the brothers control of its board.
The Barclays, who also own the Ritz Hotel and the Daily Telegraph, are expected to press for a rights issue, a cash call on shareholders to pay down Coroin’s £660 million (€800 million) debt, which needs to be cut by up to £200 million. Such an action would force Mr McKillen to come up with significant investment.
He said he has the financial firepower to fund his £70 million share of a call on shareholders or to buy his entitled share of Mr Quinlan’s stake.
If the Barclays doubted this, then they should “roll it on – test me,” he said. The developer added that he was happy to pay the estimated £15 million cost of the court case.
