Wednesday 18 September 2019

Quinlan still not bankrupt, but a 'dead man walking financially'


'A DEAD man walking financially." That's how Private Eye describes former high-flying financier Derek Quinlan in its latest edition.

With the battle between Belfast-born property investor Paddy McKillen and the billionaire Barclay brothers for control of the world-famous Claridge's, Connaught and Berkeley hotels set to recommence in London's court of appeal on February 4, the famous satirical magazine has fixed Mr Quinlan firmly in its crosshairs.

In a typically biting analysis, the magazine picks apart the mythology that grew up around the former tax inspector-turned-financier during the boom among Ireland's moneyed professional classes, going so far as to suggest that without the ongoing financial support of Sir Frederick and Sir David Barclay, the "Irish property bust-out" would have been declared bankrupt by now.

And while the Barclay brothers have always insisted that the millions they have advanced to Mr Quinlan since 2010, mostly through his wife Siobhan, were given to help the financier get back on his feet, Private Eye takes an altogether different view of the brothers' largesse and indeed their decision to repay his creditors and lawyers.

Indeed, were Mr Quinlan to be declared bankrupt or to default on any of his debts, the magazine points out that this could trigger a forced sale of his 35 per cent shareholding in Coroin (the company behind the prestigious London hotels), allowing Paddy McKillen to exercise his pre-emption rights, achieve his longstanding aim of overall control and weaken the Barclays' position in the process.

Referring to the increasingly bitter battle between Mr McKillen and the billionaire brothers, the magazine also questions the role played by Nama in the whole affair and wonders how, despite being "one of the agency's biggest customers", Derek Quinlan "unlike many lesser debtors, has not been made bankrupt".

Commenting on the financier's current living arrangements, Private Eye says: "He continues to live what can only be described as an enviable lifestyle in London helped by generous loans from the philanthropic Sir David and Sir Frederick.

"They have advanced £1.86m plus €1m to the Quinlan family, mostly via his wife, since 2010. The Barclays have repaid Quinlan creditors and funded his lawyers. No wonder it might be thought he is supportive!"

Turning to the subject of the recent rights issue in which Coroin successfully refinanced £145m of its overall £660m debt in an effort to put the company on a more stable financial footing, the magazine notes the assistance given by the Barclays to Mr Quinlan in raising the £51m he required to prevent his shareholding from being diluted.

"As a dead man walking financially, Quinlan could not raise the money – if he had had £51m it would have had to go to the Irish taxpayer and his other creditors.

"But had Quinlan not taken up his new shares, they would have had to be offered to McKillen and the Barclays, thereby diluting Quinlan and weakening the Barclays' control. So the all-but-bankrupt Quinlan magically had £51m to invest!

"Why Quinlan has not been made a bankrupt is a mystery. He insists it helps his creditors to live large while negotiating with buyers of his remaining assets," it added.

"But if he were made bankrupt or if he defaulted on any debt, this could trigger a forced sale of his Coroin shares, the pre-emption option for McKillen, and unravel the Barclays' carefully constructed campaign to gain control. Why Nama goes along with Quinlan is another mystery."

Sunday Independent

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