McKillen in conspiracy case against Barclays

BUSINESSMAN PADDY McKillen has started a legal challenge against his co-owners in the Maybourne London hotel group, claiming that he has been oppressed as a minority shareholder.

Mr McKillen claims in his action in the High Court in London that David and Frederick Barclay have orchestrated a conspiracy to take over the Maybourne hotel group.

The businessman is suing Maybourne Finance, the company used by the Barclays brothers to buy €800 million of debt on the group from the National Asset Management Agency, last month. He owns 36 per cent of Coroin, the firm behind the Claridge’s, Connaught and Berkeley hotels.

He is also suing three Coroin directors who were appointed to the board by the Barclays. A spokesman for the brothers, who own the Daily Telegraphand the Ritz hotel in London, declined to comment.

Mr McKillen is examining the possibility of taking an action against Nama in the Irish courts as he believes the agency did not follow fair procedures selling the group’s debt to the two brothers.

Nama acquired the debt on the hotel group from Anglo Irish Bank and Bank of Ireland in June 2010. Mr McKillen is claiming he was given 57 minutes’ notice of Nama’s sale of the debt. The deal with the Barclays leaves Mr McKillen in a vulnerable position as they can demand conditions on the loans. Nama’s spokesman said the transaction had closed and any outstanding issues were for the shareholders, not the agency.

The agency managed the sale carefully given that Mr McKillen won a Supreme Court case against the transfer of other loans to Nama on a claim that the agency had not followed fair procedures. The debt sold by Nama was due by a corporate entity rather than by the shareholders in the group.

Mr McKillen’s proceedings, reported by Bloomberg yesterday, were also issued against Misland (Cyprus) Investments, which owns 25 per cent of the hotel group.

The Barclays acquired the company from Manchester businessman Peter Green, one of the original investors in the group arising from its purchase by Irish financier Derek Quinlan in 2004. They also bought 3 per cent from Davy stockbroker Kyran McLaughlin. They also own debt behind 35 per cent held by Mr Quinlan, giving them effective ownership of 64 per cent control of the board and group.