Thursday 21 November 2019

Ability to hang tough serves investor well in courtroom dramas

Hotels court case...Belfast developer Paddy McKillen leaves The Rolls Building at The High Court, in central London, for his legal dispute against the Barclay Brothers. PRESS ASSOCIATION Photo. Picture date: Monday March 19, 2012. Three leading businessmen are embroiled in a High Court battle over the control of three of London's most famous hotels - Claridges, the Connaught and the Berkeley.
Patrick McKillen, from Belfast, wants to block a 'takeover plan' by Sir David Barclay and his twin brother, Sir Frederick. See PA story COURTS Hotels. Photo credit should read: Yui Mok/PA Wire...A
Hotels court case...Belfast developer Paddy McKillen leaves The Rolls Building at The High Court, in central London, for his legal dispute against the Barclay Brothers. PRESS ASSOCIATION Photo. Picture date: Monday March 19, 2012. Three leading businessmen are embroiled in a High Court battle over the control of three of London's most famous hotels - Claridges, the Connaught and the Berkeley. Patrick McKillen, from Belfast, wants to block a 'takeover plan' by Sir David Barclay and his twin brother, Sir Frederick. See PA story COURTS Hotels. Photo credit should read: Yui Mok/PA Wire...A

Dearbhail McDonald and Donal O'Donovan

Has Paddy McKillen finally outmanoeuvred the Barclay Brothers for control of three luxury London hotels? The boardroom-courtroom blockbuster, featuring the enigmatic former financier Derek Quinlan – who lies at the centre of this dizzying dispute – is complex. But it has been a gladiator-style game of hang tough, whose prize is control of Claridge's, the Berkeley and the Connaught hotels.

McKillen, who took on and defeated NAMA in his 2011 Supreme Court battle to prevent the agency taking over his loans, insists he is no builder, but a blue-chip property investor who is in it for the long-term. His tenacity in playing it long is one of the reasons why he has won the latest battle in the war for Coroin, the company that owns the trio of hotels.

McKillen is the biggest single shareholder in Coroin with 36.2pc, David and Frederick Barclay own a 28pc stake, while Quinlan has 35.8pc.

Quinlan struck a complex deal with the Barclays which gave the brothers rights to his votes in Coroin. By his own admission, Quinlan has been bankrolled by the Barclays, ostensibly as a sign of friendship. This prompted McKillen to cry foul.

McKillen appeared defeated after the High Court in London ruled that the transfer of control of shares by Quinlan to the Barclays did not breach McKillen's pre-emption rights under a shareholders agreement set up when the London hotels were first bought in 2004.

But McKillen, whose Coroin stake was vulnerable while the Barclays and others vied to buy his personal loans from the former Anglo Irish Bank, is now back on firmer ground after receiving backing from American private investment firm Colony Capital. What happens next is anyone's guess.

But McKillen's deal to refinance his debt redirects attentions on the Barclays – whose own loans are secured on Quinlan's controlling stake.

Irish Independent

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