FINANCIER DEREK Quinlan is having his considerable legal team paid for by the Barclay brothers in his battle with former business partner Patrick McKillen, it emerged yesterday.
The billionaire twin brothers and Mr Quinlan are locked in a legal battle with Belfast-born property investor Patrick McKillen about the ownership of three landmark London hotels.
The dispute has led to London’s High Court where Mr McKillen claims Mr Quinlan “unlawfully transferred” his shares in the £1 billion company Coroin that owned Claridge’s, the Berkeley and the Connaught hotels to the Barclays.
Mr McKillen claims the transfer breached a 2004 shareholders agreement he signed when they purchased the hotels with Mr Quinlan which gave existing shareholders a first refusal right before stakes were sold to a third party.
Coroin former director and Barclay brother lieutenant Richard Faber revealed under cross-examination Mr Quinlan’s legal fees would be paid for by the Barclays.
Mr Quinlan employs Cambridge University educated commercial litigation QC Stephen Auld, two junior barristers and a firm of instructing solicitors Quinn Emanuel Urqhuhart and Sullivan to mount his defence.
It was also revealed that during the negotiations for the sale of Mr Quinlan’s stake in Coroin in early 2011 that Sir David Barclay gave the embattled financier and his family up to £3 million in a series of payments over a year.
Mr Faber claimed these payments were to “help a friend in need” and the amount of money was not “necessarily a concern” for the billionaire brothers.
Mr Faber told the court before the collapse Mr Quinlan had “effectively gifted” the Barclays a £15 million Chelsea property and any payment needed to be viewed with that in context. The former Irish financier ran into a “dire financial position” after the collapse of the Irish property market and his investment company Quinlan Financial.
His debts, including millions in borrowings to buy the stake in the hotels and other property deals, were taken on by Nama.
After buying a number of his debts the Barclays are now Mr Quinlan’s second biggest creditor.
But before the Barclays’ interest controlled Mr Quinlan’s debt he came under criticism for his lavish lifestyle by Nama representative Paul Hennigan. In a letter read to the court Mr Hennigan chastised the heavily indebted financier for his continued “lavish lifestyle”.
Mr Hennigan said: “You and other borrowers’ lavish lifestyle is at odds with your dire financial position. Every second you continue that lifestyle, given that you have admitted you will not be repaying your debt to Nama, it is subsidised by the Irish taxpayer. This is unacceptable.”
Philip Marshall QC, representing Mr McKillen, asked Mr Faber if the payments were “not to help a friend in need but to keep Mr Quinlan in a lifestyle he was accustomed to”. Mr Faber said he could not comment on his lifestyle.
He added: “You reference sums of about £2 million. I mean this has to be viewed in context with Mr Quinlan effectively made a gift of a 15,000sq ft property in Chelsea made available to the Barclays. I don’t think they are concerned in the context of it is a £10 to £15 million type of facility that has been made available to the Barclays to build a school.
“Given that I don’t think Sir David was worried about a £2 million payment, you have to keep it in that context.”
Asked why Mr Barclay had not helped Mr Quinlan when he first ran into financial troubles in 2009 Mr Faber said: “No man wants to go running to a friend when he runs out of money.”
Mr Faber admitted the Barclay brothers legal team had attempted to glean Mr McKillen’s social security number in the United States.
He said: “That was to do with the legal action. We were concerned Mr McKillen was not able to pay for the legal action he had bought and we were interested as to where he was based.” Mr Faber denied investigators had been hired to probe Mr McKillen’s affairs. The hearing continues.
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