McKillen woe as UK court backs NAMA debt transfer
BRITAIN'S billionaire Barclay brothers were last night toasting a UK court ruling that vindicated NAMA's transfer of over €800m in debt owed by developer Paddy McKillen to one of their firms.
The debt, originally loaned by Anglo Irish Bank and Bank of Ireland, was used to buy three landmark London hotels -- Claridges, the Connaught and the Berkeley. Buying the loans from NAMA in 2011 effectively enabled the Barclay twins, David and Frederick, to assume control of the exclusive hotels.
The UK's Court of Appeal yesterday ruled that Mr McKillen's Coroin firm had not been entitled to notice from NAMA about the transfer of the loans or to be consulted about it.
Mr McKillen claimed that he and other shareholders in Coroin, the hotels' holding firm, were given just 52 minutes' notice by NAMA that the agency was about to sell the £660m (€824m) in debt last September to Maybourne Finance, controlled by the Barclays. Mr McKillen owns just over 36pc of Coroin.
Belfast-born Mr McKillen alleged the transfer of the debt to Maybourne was invalid. He argued that NAMA had failed to stick to a contractual agreement to consult Coroin before any transfer was made.
UK High Court Justice David Richards had previously ruled that Coroin should have been consulted.
His decision was reversed yesterday by the Court of Appeal in London.
Other shareholders in Coroin included financier Derek Quinlan. He agreed to sell his 35pc stake last year to the Barclay brothers.
In the ongoing legal proceedings being deliberated on by Mr Justice Richards, Mr McKillen has also challenged that transfer.
A ruling on the high-profile and frequently bitter case is likely to emerge towards the end of July.
The Barclay brothers have bankrolled a lavish lifestyle in London for Mr Quinlan, as well as funding his legal team in the case which has drawn in well-known names including U2 frontman Bono and former UK prime minister Tony Blair.
"I am delighted that the English Court of Appeal has upheld the validity of NAMA's transfer of the Coroin debt, a transaction which led to a very substantial financial recovery by NAMA," the bad bank's chief executive, Brendan McDonagh, said yesterday.
NAMA was also awarded costs in the action.
A spokeswoman for Mr McKillen said that yesterday's judgment was a "small part of the main case and does not strike out any of our claims".
Mr McKillen was refused leave yesterday by Justice David Neuberger to appeal the case to the UK's Supreme Court.
However, a spokeswoman for Mr McKillen said the developer would seek to pursue an appeal regardless.
The Barclay brothers, who also own the 'Telegraph' newspaper group and the Ritz Hotel in London, welcomed yesterday's ruling.
"The Barclay interests have consistently maintained that the acquisition by Maybourne Finance of Coroin's debt was wholly valid, and we are pleased that the Court of Appeal has once again agreed with the Barclay interests' position," said lawyers for the brothers.
A solicitor for the brothers said that their view remains that Mr McKillen's other claims are "without merit".