Tycoons at war: the truth behind McKillen and Quinlan feud
Published 11/07/2014 | 02:30
THE full depth of the bitterness between two of Ireland's once wealthiest men, Paddy McKillen and Derek Quinlan, has been revealed for the first time.
Both men have given the most candid account yet of their loathing for one another and weariness of this country in a series of interviews with US magazine 'Vanity Fair'.
The bad blood dates back almost exactly a decade to when Mr Quinlan convinced Mr McKillen to join a consortium to buy four of London's most luxurious hotels in August 2004.
Those hotels – the Savoy, the Berkeley, the Connaught and Claridge's – were eventually bought for more than a €1bn, sparking a battle for ultimate control that has involved some of the best-known names in business.
A bitter Mr McKillen compares Mr Quinlan to Judas after the former partner gave away voting rights in the crucial battle for control of the hotels several years later.
"Not many times in your life do you just feel your partner sitting beside you has just thrown you under the bus," he says.
Mr Quinlan, for his part, gloats that Mr McKillen now finds himself forced to cede control of his stake to a US hedge fund.
The relationship between Mr McKillen and the billionaire Barclay brothers is even worse. "He pathologically f***ing hated them," an associate of Mr McKillen tells the magazine.
"His view was they were absolutely awful people. He was never going to deal with them – over his dead body."
Mr McKillen himself goes further, calling the twin brothers "gypsies".
The unlikely partnership between Mr Quinlan and Mr McKillen fractured quickly after the August 2004 deal.
The Barclay brothers have repeatedly attempted to take control of Mr McKillen's stake in the hotels.
Last night, Mr McKillen told the Irish Independent: "I will never sell, that is a fact."
He claimed that Mr Quinlan had put him in "a terrible situation" and predicted that Mr Quinlan would soon "go bust".
The Belfast-born investor said that the Barclay brothers had become "entrenched in a war" with him for control of three luxury hotels in London.
Mr McKillen said he had offered an olive branch on five separate occasions to the owners of the 'Telegraph', but said they had shunned his approaches.
In the 'Vanity Fair' feature Mr McKillen and Mr Quinlan speak about each other in scathing terms.
"Quinlan was only interested in red wine and parties," Mr McKillen said.
"Paddy's view on me says more about Paddy than me," Mr Quinlan countered.
Mr Quinlan says he owes hundreds of millions but continues to live in luxury and skies in Saint-Moritz, drinks fine wines and drives a Range Rover. He lives in London where the former Revenue Commissioner official is recovering from a triple by pass.
Mr McKillen, who is a friend of Bono's, has kept much of his empire intact but has lost control of his stake in the hotels to a US hedge fund.
The hotel deal also involved other well-known faces including Riverdance creators Moya Doherty and John McColgan, who owned 10pc, and the Green family – owners of several high street chains, including Topshop – who owned 22pc.
While these people put up cash, the vast bulk of the money used to buy the hotels was loaned by Anglo Irish Bank to the consortium, eventually leaving the taxpayer on the hook.
Mr Quinlan, the son of an Irish army officer, described how he wept when he saw an Irish flag flying over Claridge's, the magazine reports.
"Here was a group of Irish people buying the bastion of the British establishment," his 60-year-old friend Gerry Murphy tells the magazine. "It was a spectacular, unbelievable dream."
As the financial crisis began to bite and Mr Quinlan missed payments on his massive house in the South of France, he turned to David and Frederick Barclay, who own one of the Channel Islands where they own a 92-room nouveau-Gothic castle.
"The island Brecqhou is very small and (the castle) is like a seven-tier Christmas cake. It looks like the weight is breaking the island. It's the most sinister, bizarre thing. Nothing prepares you for it," Mr McKillen said.
According to the article, the Barclays effectively pay for Mr Quinlan's car, his house and his children's educations.
The Barclays' support for Mr Quinlan, including a $600,000 (€440,873) loan that has never been repaid, deepened the animosity between the twins and Mr McKillen and laid the ground for the bitter dispute.
A bid by the Barclays for the hotel group was rejected by Mr McKillen following a farcical meeting in the Barclay-owned Ritz, which saw one of the brothers tell off Mr McKillen for not wearing a tie.
"He said, 'Sit down. You're lucky you're coming to meet me or you wouldn't have got into this hotel,'"
Mr McKillen tells the magazine. "When I sat down I was fuming. I was burning inside, and I just said, 'Do I walk out now? Is this the biggest insult?'"
He then received a 30-minute lecture on how Irish people should have voted in the Lisbon Treaty. The court battles that followed saw Mr McKillen taking on NAMA and winning and taking on the Barclays and losing.
While Mr McKillen has won some of his legal battles, he was forced to borrow cash from a $34bn hedge fund called Colony Capital when IBRC was liquidated and the loans sold off by the liquidators.
He still believes he can win control of the hotel group but the man backing him is less sure.
Hedge fund manager Tom Barrack suggests that a compromise will be struck.
"At the end of the day this is just business, and the right business decision will bubble to the top of a foggy cauldron," Mr Barrack said.
Irish IndependentFollow @Indobusiness