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Barclay brothers cleared in latest battle for Maybourne Hotel Group

03 July 2013 by

The entrepreneur Barclay brothers were today cleared in a multimillion-pound Appeal Court battle of unlawfully trying to deprive an Irish businessman from his ownership rights of three of London's most famous hotels.

Dublin-based businessman Patrick McKillen, originally from Belfast, was seeking damages from millionaire twins Sir David and Sir Frederick Barclay in the bitter takeover battle for control of the £1b valued company Coroin which owns the Maybourne Hotel group, the parent company of Claridges, the Connaught and the Berkeley hotels.

It was claimed that McKillen had played a "pivotal" role in building up the group from its original value of £530m to more than £1b. But his claim was thrown out by High Court judge Mr Justice David Richards in August last year.

Now three Appeal Court judges have unanimously dismissed McKillen's appeal and refused him permission to take his case to the Supreme Court leaving him with an estimated legal bill of £20m.

However, McKillen who employed top solicitors Herbert Smith and three leading counsel including former Attorney General Lord Peter Goldsmith, may still apply direct to the Supreme Court to ask them to consider his case.

The Barclay brothers , who also own the Ritz, London, have always denied any wrong doing. They alleged McKillen, a property developer and investor, had been unable to comply with his obligations in servicing loans.

Lady Justice Arden together with Lord Justice Moore-Bick and Lord Justice Rimer upheld the earlier ruling that there was "no foundation" for McKillen's claims and that there had been breaches of duty of good faith by the brothers. They also said that the directors appointed by the brothers were not in breach of their duties, and there was no prejudice to McKillen.

The court heard that McKillen was "the last-man standing" of a consortium that bought the hotels in 2004. He claimed that the brothers acted unlawfully or unfairly prejudicial to his interests. Coroin was set up in 2004 to buy hotels and McKillen was a director and substantial shareholder.

He alleged that the brother, in a bid to obtain complete control, had used various tactics which involved "infringements" of his rights under a shareholders agreement.

But Lady Justice Arden ruled that there was nothing he could complain about and there was no breach of good faith. Her fellow appeal judges agreed and dismissed his claim ordering him to pay the bulk of the legal costs.

The brothers claimed a "resounding victory" with their spokesman claiming the Appeal Court had "unanimously rejected" McKillen's claim, which had been brought to tarnish their reputations and embarrass them.

The spokesman said the ruling was a "complete and total defeat" for McKillen. "His claims have been completely rejected… yet again." He added: "The Barclay family interests have been shown conclusively to have acted lawfully and properly at all times in their dealings over Coroin.

"Mr McKillen is a minority shareholder in Coroin and his attempts to use the courts to lever himself into a majority position have failed utterly. There is nothing for him to salvage from these rulings. After nearly two years of legal proceedings , Mr McKillen is considerably worse off financially but no further forward."

McKillen said: "I am disappointed but will continue to fight on. This case has always been about whether the original shareholders should have first refusal if one of them wanted out or became insolvent.

"That is what the shareholders' agreement at the heart of this case is all about. The Court of Appeal has confirmed this right. I will continue to fight the Barclay brothers by any legal means to protect our staff, guests and our rights."

Barclay brothers battle for the Maybourne Hotel Group returns to court >>

Barclay brothers score High Court victory over battle for Maybourne Hotel Group >>

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