Business Irish

Monday 15 September 2014

McKillen lawyers say judge dealt with case in 'blinkered' manner

Shane Hickey London

Published 06/02/2013 | 04:00

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LAWYERS for developer Paddy McKillen have claimed a judge who ruled against him in an ongoing legal battle for control of three high-profile London hotels dealt with the case in a "blinkered and unrealistic" way.

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A former British attorney general, who is now representing the Belfast-born businessman, said Judge David Richards was wrong when he ruled against Mr McKillen last year in a fight to control Coroin, the €1.2bn company which owns Claridge's, the Connaught and the Berkeley hotels.

Yesterday was the first day of an appeal by Mr McKillen in the Court of Appeal in London following a judgment from the High Court which said financier Derek Quinlan and the billionaire Barclay brothers, owners of the 'Daily Telegraph' and the Ritz hotel, did not breach clauses in a shareholders' agreement.

Mr Quinlan's 35.5pc share of the company is in the control of the Barclays after the brothers secured the shareholding from NAMA in 2011.

Mr McKillen claimed the shares should have been offered to him under a clause in the shareholders' agreement of the company – a pre-emption agreement – but Judge Richards said there had been no agreements made between the Barclays and Mr Quinlan which breached the pre-emption provisions.

Yesterday, Peter Goldsmith, a former attorney general under the Labour government, outlined to the court five broad areas under which Mr McKillen is appealing.

Agreements

He said that a series of agreements between the Barclays and Mr Quinlan taken together amounted to a breach of the agreement.

"Our principal complaint is that he (Judge Richards) looked at this in a blinkered and unrealistic way. He did not look at the whole, but dissected this into small steps," Mr Goldsmith said.

The McKillen argument says that Mr Quinlan was in breach of contractual obligations of good faith and that questions surrounding whether Mr McKillen could have bought the shares if they had been offered to him were not relevant.

"In the circumstances, the judge was wrong to dismiss the petition, and rather should have found – and the Court of Appeal is invited to find – that the company's affairs have been and are being conducted in a manner that is unfairly prejudicial to Mr McKillen's interests as a shareholder," said a written argument to the court from Mr McKillen's legal team.

They claim the Barclay brothers have been "riding roughshod" over Mr McKillen's pre-emption rights, which they say were triggered.

A part of Judge Richards' judgement states that Mr McKillen was the "last man standing", to which Mr Goldsmith said, if this was the case, it was "quite astonishing" that he was not given the right to bid for Mr Quinlan's shares.

The McKillen side claims there was a concerted effort on the Barclay side to avoid pre-emption provisions.

Mr McKillen owns 36.2pc of Coroin and the Barclays 28.36pc.

The case is set to continue today.

Irish Independent

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