Both sides seek silver lining in ongoing battle for control of London hotels
The legal battle between Paddy McKillen and the Barclay brothers could run for years
Lady Justice Arden rejected his argument that the Barclays and Quinlan had not acted in good faith, saying that could not “impose a binding general obligation to act in a manner outside the terms of the shareholders’ agreement”.
In McKillen’s view, the Barclays have invested over £300 million in a company they will never be able to control permanently since Quinlan’s shares will have to be divided up once they finally come into play.
For now, there is no sign of that happening, since Quinlan is being funded by the Barclays, but McKillen clearly believes eventually it will – though that would require a volte-face by Nama, since it could have sought Quinlan’s bankruptcy before now and has not done so.
The next step for McKillen is to call a meeting of Coroin’s directors and propose that Quinlan’s shares are offered for sale to both himself and the Barclays proportionally – this which would give him majority control, if it happened.
Since the Barclays control the board, this is a vote that he will lose. Then, he will have to decide if he can take a case in London arguing that the directors have failed in their fiduciary duties – though it would appear that he would first need Quinlan to default on a new debt.
The Barclays can argue that his near-€300 million debt to the Irish Bank Resolution Corporation – soon to be morphed into Nama – has become enforceable, an event that would trigger the sale of his shares in Coroin, if that was judged to be so by the courts.
Given that relations between McKillen and the Barclays are poisonous and that they agree on nothing, it was hardly surprising that a gulf existed between the two sides in how they interpreted yesterday’s ruling.
“This is a complete and total defeat for McKillen. He has had numerous judgments against him in this case and has lost every major point on which he has appealed,” said Barclay director Richard Faber, who was one of those who gave evidence.
The short hearing in Court 69 yesterday was not the end of the war between the sides, even if it might looked like it was to observers. Months, if not years of legal wrangling lie ahead before the hotels will finally know their future.