Nama drawn into McKillen legal row with Barclays

THE NATIONAL Asset Management Agency has been drawn into another legal action involving property investor Paddy McKillen, this time over its sale of the debt on the Maybourne hotel group to his rivals, the Barclay Brothers.

The High Court in London has joined Nama to the action taken by Mr McKillen, a shareholder in the group behind the Claridges, Berkeley and Connaught hotels in London, against the brothers over the alleged suppression of his minority interests in the business.

Mr McKillen, who owns just over 36 per cent of the group, is suing the brothers, who have effective control over almost 64 per cent, to take control of the hotels.

Nama sold the €800 million debt on the group to Maybourne Finance, a company controlled by David and Frederick Barclay, owners of The Ritz hotel in London and the Daily Telegraph.

The brothers have been building up their stake in the group since the start of this year, acquiring 28 per cent of the shares in the group held by the family of Manchester businessman Peter Green and stockbroker Kyran McLaughlin.

They have taken effective control over almost 35 per cent owned by former property investor Derek Quinlan by acquiring debt owing on his stake. A spokesman for Nama confirmed that it had been joined to Mr McKillen’s action but added that the agency could object to this. “We will consider our options,” said the spokesman.

The agency has seven days to object to being a party in the case.

Mr McKillen fought a long-running legal battle against Nama to keep most of his loans out of the agency in a case that he won in the Supreme Court earlier this year.

The agency subsequently decided not to acquire his loans.

A spokeswoman for Mr McKillen had no comment to make on Nama being drawn into the action which will go to trial next March.

Following the first hearing of the case on Monday, his spokeswoman said: “The Barclay Brothers have launched a hostile take-over bid on our company that resembles an old-style corporate raid. We believe the law is there to protect business from this type of activity.”

The brothers have made no public comment. Nama sold them the Maybourne debt on September 28th, two days before the loan was due to expire. The agency said it had acquired the debt from two Irish banks in June 2010.

Mr Quinlan led a group of investors in the €1.1 billion purchase of the group in 2004 but has been forced to sell assets to reduce his debts to Nama.