THE UK's Supreme Court in London has rejected developer Paddy McKillen's appeal against an earlier ruling that backed the sale by NAMA of £660m of debt to his business adversaries, billionaire investors Sir Frederick and Sir David Barclay.
The appeal was not considered by the London Court because the case did not raise a point of law of "general public importance which ought to be considered by the Supreme Court at this time," it said in a ruling issued yesterday.
''The ruling is the latest blow to Mr McKillen's strategy of using costly legal action as a delaying tactic. This approach is to the detriment of Coroin, which urgently needs to be put back on a firm financial footing," said Phil Peters, a director of Maybourne Finance, one of the companies at the heart of the case.
The case was part of a wider series of legal battles between Mr McKillen and the Barclays who are his partners in Maybourne, the company that owns London's Berkeley, Connaught and Claridge's hotels.
Those hearings are set to continue in February.
In the meantime, the Barclay brothers control a majority stake in the company that owns the hotels, and after buying loans from the National Asset Management Agency (NAMA), also control the company's debts.
The £660m loan has expired and the Barclays have initiated a refinancing they say is matched to the hotels' ability to repay no more than £35m per year.
Under the plan, Mr McKillen will have to come up with £52m of the £145m provided by shareholders under a rights issue, or risk losing some of his stake in the business.
Private equity giant Blackstone is to lend £535m to the hotels under the scheme.
Mr McKillen is understood to be examining legal options to block the rights issue, after opposing the plan at a shareholder vote.
He favoured an alternative plan that would see the debt refinanced through new loans from Qatar's ruling al-Thani family. US investors Starwood Capital has also made a proposal.
The hotels are valued at more than £1bn. The battle for control is one of the most bitter business disputes ever waged and has dragged in state-controlled NAMA and Irish Bank Resolution Corp (IBRC), which is a major creditor of the developer.
Sources close to the Barclays last night insisted that IBRC was wrong to reject their offer to pay £130m to buy the bank's security over Paddy McKillen's stake in the London hotels earlier this year.
The rights issue proposal values the stake at just £100m, the source said.
Paddy McKillen is fully up to date with all of the interest on loans he owes to IBRC and his businesses are profitable, his spokeswoman said.
It would make no sense for the lender to damage his business interests, and potentially, his ability to repay the state-owned bank, she said.