McKillen loses Barclays action
Property developer Paddy McKillen has lost his High Court action in London against the billionaire Barclay brothers over control of three of the city’s finest hotels.
Ruling against Mr McKillen, Mr Justice David Richards said no agreements had been made between the Barclays and Irish financier Derek Quinlan which triggered rules in the shareholders’ agreement that would have given Mr McKillen the right to buy Mr Quinlan’s shares.
The security held over Mr Quinlan’s shares in the holding company, Coroin, which owns the Berkeley, Connaught and Claridges hotels, had not become enforceable, the judge said when Mr Quinlan signed over the voting rights held in the shares to the Barclays.
Following the judgment, Mr McKillen, who is from Belfast, still owns a 36.2 per cent shareholding in Coroin.
While Mr Quinlan continues to own 35.4 per cent of the shares, control of them is vested in the Barclay brothers, giving them majority control.
The Barclays originally owned 24.7 per cent but this has grown since their original investment in January 2011 to 28.36 per cent.
A spokeswoman for Mr McKillen said that he plans to appeal today’s ruling.
During the trial, Mr McKillen alleged that the efforts taken by the Barclays involved breaches of an agreement made amongst the shareholders, and breaches of duty by Coroin directors appointed by the Barclays.
On this point, Mr Justice Richards said two directors appointed by the Barclays had breached the duty not to put themselves in the position where there was a conflict of competing duties -in this case their duties as directors to the company and their duties as executives of companies associated with the Barclay brothers. He said one of them communicated with the National Assets Management Agency without disclosure to other Coroin directors.
However, Mr Justice Richards said: “Those breaches of duty caused no loss to the company or prejudice to Mr McKillen as a shareholder. There is no foundation for the claims in tort.”
In a statement issued on their behalf, the Barclays welcomed the ruling, which was described as a “comprehensive victory” for them.
Richard Faber, speaking on behalf of the Barclay interests, said: “We are delighted that today’s judgment has completely vindicated the Barclay interests’ position and brought to an end this unnecessary and distracting dispute.
“After 30 days in court the judge has looked in detail at every aspect of Mr McKillen’s case, and has found it to be without any merit.
“It should never have been necessary for the Barclay interests to defend these baseless proceedings, which we always believed were an attempt by Mr McKillen to tarnish the Barclay interests’ reputation in the misconceived hope that they would then sell out to him.