Property developer McKillen loses latest stage of UK legal challengeWednesday 03 July 2013 22.58
Property developer Paddy McKillen has lost the latest stage of a long-running legal battle over control of a £1 billion company which owns three of London's most famous hotels.
Mr McKillen lost the opening round of his battle with twins David and Frederick Barclay in the British High Court last year.
Now, the country’s Court of Appeal has refused to overturn the High Court's decision.
Judges heard that Mr McKillen and the Barclay brothers were investors in Coroin, the company which owns and manages Claridge's, the Connaught and the Berkeley hotels.
At the centre of the dispute are shares held in the name of Derek Quinlan, which are now controlled by the Barclay brothers.
Mr McKillen claims he has the right to acquire this stake and has said that company affairs were conducted in a "manner unfairly prejudicial to his interests".
The Barclay brothers disputed the claims and said Mr McKillen's allegations were designed to tarnish their reputations and embarrass them.
Three appeal judges - Lady Justice Arden, Lord Justice Moore-Bick and Lord Justice Rimer - ruled against Mr McKillen.
They also said he should pay almost all of the costs the Barclay brothers had incurred fighting the appeal - as well as his own - though it is understood that Mr McKillen intends to seek leave to appeal this.
Following the ruling the Barclay family claimed Mr McKillen's latest challenge had been "unanimously rejected".
"This is a total and complete defeat for Mr McKillen," said a spokesman for Barclay family companies. "His claims have been flatly rejected ... yet again."
A spokesman for the brothers said the ruling showed that they had acted entirely lawfully and properly.
However a spokesperson for Mr McKillen said one point of his appeal had been backed by the court, namely that Derek Quinlan's shares had become enforceable.
This would allow him to call a board meeting, where he would argue that he had the right to buy those shares.
The spokesperson said Mr McKillen was “disappointed that the Court of Appeal did not determine that he can immediately purchase Mr Quinlan’s shares” but the ruling still opened the way for him to gain majority control of Coroin.
Mr McKillen said after the ruling: "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."