THE NATIONAL Asset Management Agency was days away from tipping a £1 billion hotel company into administration before the Barclays Brothers bought its debt, a British court has heard.

Nama controlled a £660 million debt of Coroin, a company that owned three landmark hotels – Claridge’s, the Berkeley and the Connaught. It sold the debt to billionaire twins the Barclay brothers on September 27th last year.

Sir David and Sir Frederick at the time owned 25 per cent of Coroin and were attempting to acquire Irish financier Derek Quinlan’s stake to bring their total to 64 per cent. Coroin’s ownership and control of the hotels is the subject of a high court dispute between the Barclays and investor Paddy McKillen, who owns 36 per cent of Coroin.

A senior Barclay brother’s lieutenant Richard Faber said yesterday that Nama would have put Coroin into administration at the end of September had the brothers not arranged to buy the company’s debt through finance from Barclay’s Bank.

Mr McKillen has accused the brothers of using illegal tactics to purchase the company’s debt unlawfully. He also claims the brothers planned to use their position as the company’s creditors to force him out.

Mr McKillen also claims Nama gave the Coroin board less than an hour before they transferred the debt to the Barclays-controlled company MFL. Mr Faber, a Coroin board member at the time, admitted he knew of the deal the weekend before an offer was made but decided not to tell the rest of the board. However, he said the offer to purchase the debt was a “life raft” for Coroin as it was in a “dire financial state” and Nama was poised to send the company into administration.

“We were in dire straits,” he said. “We have shareholders in dispute and Nama forced us to roll over the debt seven times and defaulted on us once. It was clear Nama wanted to sell the debt.”

The case continues.