Quinlan denies fleeing to Switzerland to avoid creditors
EVIDENCE:FINANCIER DEREK Quinlan has denied he moved to Switzerland to flee from his creditors in Ireland.
Mr Quinlan, who owes €1.7 billion to the National Asset Management Agency, moved to Switzerland in 2009 in the midst of the economic meltdown and after many of his debts had been taken over by the Government agency. He is the second respondent in the case taken by property developer Patrick McKillen over the ownership of three landmark hotels.
Mr McKillen claims former tax inspector Mr Quinlan and the billionaire Barclay Brothers conspired together to deny him an opportunity to buy a controlling stake in a £1 billion hotel company.
In documents released to London’s High Court, Nama representatives had said Mr Quinlan had informed them he went to Switzerland to be out of reach of writs and summonses from his creditors.
Under cross-examination from Mr McKillen’s lawyers yesterday, though, Mr Quinlan denied he was running from his creditors.
“One of the reasons you departed was to make it more difficult for creditors to pursue you?” Philip Marshall QC asked.
Mr Quinlan said: “No, it was not, and I can’t account for where they [Nama] got that. I went to Switzerland on the advice of KPMG, who were handling my affairs at the time.”
“At that point you were in dire straits financially, were you not?” Mr Marshall asked. “No,” Mr Quinlan said, “I was not in dire straits financially.” Mr Marshall interjected: “You could not even meet the interest payments on your loans, could you?” Mr Quinlan replied: “I had a cash-flow challenge.”
In 2004, Mr Quinlan, Mr McKillen and a small consortium bought the Maybourne Hotel Group, which included Claridge’s, the Berkeley and the Connaught hotels.
Mr Quinlan said his consultancy company Quinlan Investment was paid a £5 million commission for organising the deal and was paid a six-figure annual management fee. However the group fell into trouble in 2009 after the collapse of the Irish property sector and its debts were acquired by Nama.
He told the court the shareholders had forced him to give up his £450,000 a year management fee of the hotel and had tried to force him off the board.
Mr Marshall asked if it was sensible of the board to ask him to step back, given his much-publicised financial troubles. “No,” he said, “it was not a sensible proposal.”
Mr Marshall said the financier had stayed at the hotels for 110 days in a single year and was using them as his London office.
Mr Quinlan claimed the shareholders had ulterior motives for calling in the payment of his £298,000 hotels bill. “I was not using the hotel as my London office and most of those days would have been spent on Maybourne business. They may have had other motives throughout 2009 the board was trying to marginalise me.”
He believed Mr McKillen was behind the legal proceedings over the unpaid hotels bill so he could be further marginalised.
The case continues.