McKillen legal bid is hopeless, Barclays tell court
Brothers want appeal dismissed
Published 07/02/2013 | 04:00
THE billionaire Barclay brothers have described the latest legal challenge by Irish developer Paddy McKillen to gain control of three high-profile London hotels as "without merit" and "hopeless".
Legal papers from companies controlled by David and Frederick Barclay, who own the 'Daily Telegraph' and the Ritz hotel, dismiss a series of arguments from Mr McKillen in the ongoing battle to control Coroin, the €1.2bn company which owns Claridge's, the Connaught and the Berkeley hotels.
Yesterday was the second day of an appeal launched by the Belfast-born businessman following a judgment from the High Court in London last year which ruled against him over allegations that the brothers and financier Derek Quinlan breached shareholders' agreements.
Mr Quinlan's 35.5pc share of the company is in the control of the Barclays – giving them control of the company – after they secured the shareholding from NAMA in 2011.
Mr McKillen, who owns 36.2pc, claimed the share should have been offered to him under a clause in the shareholders' agreement of the company – a pre-emption agreement – but Judge David Richards said there had been no agreements made between the Barclays and Mr Quinlan which breached the clause.
In court yesterday, Kenneth MacLean QC, for the Barclay companies, said the challenge was a move by Mr McKillen to get majority control of the company along with his Qatari backers. Mr McKillen claims a series of agreements between the Barclays and Mr Quinlan taken together equal a breach of the shareholders' agreement.
However, the Barclays have said through a legal submission that they are the "majority legal shareholders" of the company and Mr McKillen has put forward "speculative submissions" on the pre-emption provisions.
The brothers, who own 28.36pc, say the pre-emption agreement did not kick in as when the agreements were made between them and Mr Quinlan, there was no transfer of a beneficial interest in the shares – meaning they don't stand to profit from the shares.
"There is nothing in Mr McKillen's case that there was a transfer of an interest in Mr Quinlan's shares," legal argument from the brothers states.
"Apart from the entirely lawful acquisition by the Barclay interests of the security interest in his shares, no proprietary interest was ever transferred and there was no attempt to transfer a proprietary interest."
The two days of the appeal have been taken up with extensive legal arguments. The Barclay side claims the judgment handed down last year by Judge Richards is "unimpeachable" and says the appeal should be dismissed.
The McKillen side claims there was a concerted effort on the Barclay side to avoid pre-emption provisions.
Stephen Auld QC, for Mr Quinlan, said there was no basis for the allegations of pre-emption being triggered.
The case is due to continue today.