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The Billion-pound Battle Over Prestigious Claridge’s of London

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Claridge’s hotel is busy preparing for trade to roar back from the pandemic.

Its penthouse suite is due to reopen this year after extensive redevelopment, with a bespoke Steinway piano and a price tag that could stretch to £100,000 a night.

Beneath the art deco lobby a team of Irish builders has been working on an ambitious five-storey excavation that will house a luxury members’ club and spa — often digging by hand to avoid disturbing the high-paying guests 10 metres up.

Sir Jony Ive, the former head of design at Apple who has stayed at Claridge’s “four or five times a year” for the past 15 years, told the Financial Times the structural renovation was “unlike anything I have ever seen before”. 

But behind the scenes in Mayfair a dispute has erupted that could prove to be the most costly in the storied history of the 220-year-old grande dame of the global hotel industry.

Billions of pounds could be at stake in a fight between Paddy McKillen, the Irish property developer who owned about a third of a hotel group that also includes the Berkeley and Connaught between 2004 and 2015, and a group of Qatari investors that acquired the properties in 2015 following a bitter ownership dispute.

The battle centres on how much luxury hotels are worth in a post-Covid world where well appointed rooms are once again filling up with guests willing to pay thousands of pounds a night.

McKillen claims he is owed billions of pounds under an agreement to share future profits struck with the Qataris at the time of the 2015 sale, which valued Claridge’s, the Connaught and the Berkeley at £1.3bn.

The terms of the contract appear clear: McKillen is in line for 36 per cent of the upside valuation of the hotels minus capital expenditure. That payout could be significant, given the work his management company has carried out to add space and improve facilities, people close to McKillen claim.

Some estimates have put a current value of more than £5bn on the hotels, although Tim Stoyle at Savills warned that luxury hotels trade so rarely “it is very hard to draw definitive trends”.

Maybourne, the hotel operator ultimately owned by Qatar’s former prime minister, Sheikh Hamad bin Jassim bin Jaber al-Thani, and its former emir, Sheikh Hamad bin Khalifa al-Thani, accepts McKillen is owed something — but disagrees on how much.

The two parties cannot even agree which hotels are included in the deal, with the contract definitely covering Claridge’s, the Berkeley and Connaught but, Maybourne argues, not newer luxury hotels in the US and France.

Paddy McKillen battled through a £50mn legal fight with the Barclay brothers for control of the Maybourne hotels and then turned to Qatar as the ‘white knight’ to resolve the impasse © PA

Owner tensions

Claridge’s has long been one of Britain’s most prestigious residences and is the flagship London hotel of the Maybourne group. Winston Churchill decamped there in 1945 after the second world war, when it had offered a refined sanctuary to the kings and queens of Norway, Holland and Greece. Britain’s current Queen has eaten so often at the hotel that it has become known as the “annexe” to Buckingham Palace.

Other guests have ranged from Diana, Princess of Wales, to Elizabeth Taylor and Audrey Hepburn to Lady Gaga.

McKillen, a Belfast Catholic and friend of prominent Irish figures such as Bono of U2, became involved with the London hotels in 2004, when he acquired a stake of just over a third in a consortium led by Irish investor Derek Quinlan.

He had built up his fortune in real estate but this was his most high-profile deal yet. The years that followed were successful for Claridge’s but punctuated by tensions over ownership.

The financial crash came quickly after the deal was struck, leaving Quinlan with unsustainable debts that were at risk of being seized by Nama, the Irish state agency set up to deal with bad loans. Quinlan sought help from Sir David and Sir Frederick Barclay, leaving McKillen angry and blindsided.

McKillen battled through a £50mn legal fight with the Barclays to try to regain control of the hotels in one of the most costly legal battles in British court history. He turned to Qatar as the “white knight” to resolve the ownership impasse.

Qatar wanted to own 100 per cent of the hotels, so struck an unusual deal that is only now being tested. McKillen emerged debt free but with a lucrative seven-year management agreement, due to end this December.

McKillen ousted

That was cut short in April this year, when McKillen awoke to an email sent to staff — and seen by the Financial Times — from Marc Socker and Gianluca Muzzi, Maybourne’s new chief executives, saying he would no longer be involved in the management or project management of the hotels with immediate effect.

Hume Street Management Consultants, McKillen’s company, was told it was not required for further work and should not seek access to the hotels’ offices or staff.

Ive, a long-time associate of McKillen, said he was “shocked” by the move. But no one was more shocked than McKillen himself, who colleagues said had expected a “dignified” jog towards retirement at the end of the year rather than a terse letter of dismissal.

McKillen had already stepped back from running two Maybourne hotels in Los Angeles and the French Riviera in January. But when the letter arrived, McKillen and his team were busy working on Claridge’s new penthouse and members’ club.

The McKillen team, which has also developed houses for Calvin Klein and Beyoncé, was hopeful of opening these before the summer. Maybourne told the Financial Times there was still “a very significant amount of work” needed to complete the Claridge’s project.

When the FT visited the development works under the hotel in April, the wood-lined spa areas were finished although the swimming pool was a shell and some levels were still walled in concrete. The rest of the work will now be carried out by other developers.

Maybourne said it had “not renewed our contract with HSMC, the company Paddy controls, after appointing new co-chief executives to reflect the changed direction of Maybourne from the management of individual assets to the creation of a global, ultra-luxury brand”.

“As is standard practice, this means HSMC staff no longer have access rights to Maybourne offices,” it added. Companies House records show that McKillen and his business partner Liam Cunningham left the board on April 1.

Audrey Hepburn cuts a cake at Claridge’s. Other guests have ranged from Diana, Princess of Wales, to Elizabeth Taylor and Lady Gaga © Hulton-Deutsch Collection/Corbis/Getty Images

The Qataris are in part represented on the Maybourne board by Michele Faissola, a former Deutsche bank executive who was last month acquitted by a Milan appeals court over alleged market manipulation and false accounting linked to his role in the Monte dei Paschi banking scandal.

The Italian motor racing enthusiast has run Dilmon, the al-Thani family office since 2018, according to his LinkedIn profile.

Requests for interviews with Claridge’s management and Maybourne were declined by Maybourne.

Ready to fight

The difficulty now for the teams of advisers being assembled is to agree on a value of the hotels — and so of McKillen’s contract.

A London-based real estate consultant said that given the Ritz sold for £800mn, or £5mn per room, in 2020, the renovated 190-room Claridge’s alone would be worth “substantially in excess” of what the Qataris paid in 2015 for the group of three London hotels.

Hume Street also argues that all of the Maybourne hotels and subsidiaries, which would include the French and US sites, are part of the deal.

Maybourne said it covers only Claridge’s, the Connaught and Berkeley hotels, and the others were brought in after McKillen’s time as a part-owner of the group.

Both sides insist the contract is clearly supportive of their view, which means the warring sides may yet head to the courts for a decision in multiple jurisdictions.

A spokesperson for McKillen said: “Any owner of the Maybourne hotels must recognise that they are custodians of unique assets that are a vital part of London’s cultural life. The Qataris have indicated that they value the hotels at a substantial discount to their acquisition cost.”

People familiar with the management’s position said an independent valuation had been made that was substantially above the acquisition price but that the large costs for works specified in the agreed contract have brought McKillen’s payment lower than he might like.

Guests who use the hotels simply hope service will run to the usual levels expected.

Samuel Johar, a headhunter who eats in Claridge’s three to four times a week, said McKillen had made the hotel “a joyous place to go to”.

“Let’s hope these two [new] guys . . . don’t screw it up.”

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Shoppers Astonished As Price of Lurpak Butter Soars to Eye-watering Sum

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CUSTOMERS have shared their shock after a 500g pack of Lurpak shot up in price to an eye-watering new level.

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Key Passages From the US Supreme Court on Abortion Rights

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The US Supreme Court on Friday struck down Roe vs Wade, the 1973 ruling that guaranteed a constitutional right to abortion, in one of its most consequential decisions on civil rights in years.

The arguments on both sides are lengthy and involved, and the final ruling comprised five separate opinions spanning 213 pages: the opinion of the court, two concurring opinions, an opinion agreeing only with the court’s judgment and a dissenting opinion.

Below are some of the most notable passages from each.

Opinion of the court, written by Samuel Alito

Much of Alito’s majority opinion matched a leaked draft from February 10, which was published by Politico in May.

To begin, Alito argued that the court overstepped when first deciding Roe.

As Justice Byron White aptly put it in his dissent, the [Roe] decision represented the “exercise of raw judicial power”, and it sparked a national controversy that has embittered our political culture for a half-century.

He argued that the case was wrongly decided, and poked at its reasoning. (He also cited Planned Parenthood vs Casey, another abortion case that affirmed Roe.)

Roe was egregiously wrong from the start. Its reasoning was exceptionally weak, and the decision has had damaging consequences. And far from bringing about a national settlement of the abortion issue, Roe and Casey have enflamed debate and deepened division.

Alito argued that there is no right to an abortion rooted in American “history and tradition”.

We hold that Roe and Casey must be overruled. The constitution makes no reference to abortion, and no such right is implicitly protected by any constitutional provision, including the one on which the defenders of Roe and Casey now chiefly rely — the Due Process Clause of the Fourteenth Amendment. That provision has been held to guarantee some rights that are not mentioned in the constitution, but any such right must be “deeply rooted in this nation’s history and tradition” and “implicit in the concept of ordered liberty”.

He reiterated the Roe court’s “errors” and lamented that the issue had been taken out of the hands of those who opposed abortion rights.

Roe was on a collision course with the constitution from the day it was decided . . . and the errors do not concern some arcane corner of the law of little importance to the American people. Rather, wielding nothing but “raw judicial power,” the court usurped the power to address a question of profound moral and social importance that the constitution unequivocally leaves for the people . . . The court short-circuited the democratic process by closing it to the large number of Americans who dissented in any respect from Roe . . . Roe and Casey represent an error that cannot be allowed to stand.

Finally, Alito wrote that court does not know, and need not consider, the implications of its decision.

We do not pretend to know how our political system or society will respond to today’s decision over-ruling Roe and Casey. And even if we could foresee what will happen, we would have no authority to let that knowledge influence our decision. We can only do our job, which is to interpret the law, apply longstanding principles of stare decisis, and decide this case accordingly.

We therefore hold that the constitution does not confer a right to abortion. Roe and Casey must be overruled, and the authority to regulate abortion must be returned to the people and their elected representatives.

Concurring opinion by Clarence Thomas

Thomas, widely considered to be the most conservative justice, agreed. He also said the court should perhaps go further and reconsider its decisions on contraception, same-sex relationships and same-sex marriage, citing Supreme Court cases relevant to each issue.

For that reason, in future cases, we should reconsider all of this court’s substantive due process precedents, including Griswold, Lawrence, and Obergefell. Because any substantive due process decision is “demonstrably erroneous,” we have a duty to “correct the error” established in those precedents.

Concurring opinion by Brett Kavanaugh

Kavanaugh, another conservative, wrote to share his “additional views”. He emphasised that the court was returning the issue of abortion to the people, rather than outlawing it.

To be clear, then, the court’s decision today does not outlaw abortion throughout the United States. On the contrary, the court’s decision properly leaves the question of abortion for the people and their elected representatives in the democratic process.

He claimed the constitution was “neutral” when it comes to abortion rights.

In sum, the constitution is neutral on the issue of abortion and allows the people and their elected representatives to address the issue through the democratic process. In my respectful view, the court in Roe therefore erred by taking sides on the issue of abortion.

And he wrote that court itself must be “scrupulously neutral” — a point to which the court’s liberals took exception.

In my judgment, on the issue of abortion, the constitution is neither pro-life nor pro-choice. The constitution is neutral, and this court likewise must be scrupulously neutral. The court today properly heeds the constitutional principle of judicial neutrality and returns the issue of abortion to the people and their elected representatives in the democratic process.

Opinion by John Roberts, concurring in judgment

Roberts, the chief justice, concurred with the court’s specific judgment upholding Mississippi’s 15-week restriction on abortions, but not with the dramatic scope of its decision. He called it a “serious jolt to the legal system”.

I would take a more measured course . . . Our abortion precedents describe the right at issue as a woman’s right to choose to terminate her pregnancy. That right should therefore extend far enough to ensure a reasonable opportunity to choose, but need not extend any further.

He reiterated that overturning Roe was unnecessary to deciding the case.

I would decide the question we granted review to answer — whether the previously recognised abortion right bars all abortion restrictions prior to viability, such that a ban on abortions after 15 weeks of pregnancy is necessarily unlawful. The answer to that question is no, and there is no need to go further to decide this case.

Dissenting opinion by Stephen Breyer, Sonia Sotomayor and Elena Kagan

The impassioned dissent by the court’s three-member liberal wing begins by pointing to the “half a century” during which Roe vs Wade “protected the liberty and equality of women”.

Respecting a woman as an autonomous being, and granting her full equality, meant giving her substantial choice over this most personal and most consequential of all life decisions.

They said they fear the “draconian restrictions” and punishments that states may now mete out.

Enforcement of all these draconian restrictions will also be left largely to the states’ devices. A state can of course impose criminal penalties on abortion providers, including lengthy prison sentences. But some states will not stop there. Perhaps, in the wake of today’s decision, a state law will criminalise the woman’s conduct too, incarcerating or fining her for daring to seek or obtain an abortion.

And in any case, they wrote, women’s rights have been curtailed.

Whatever the exact scope of the coming laws, one result of today’s decision is certain: the curtailment of women’s rights, and of their status as free and equal citizens.

The dissenters also took a direct shot at Kavanaugh’s neutrality argument.

When the court decimates a right women have held for 50 years, the court is not being “scrupulously neutral”. It is instead taking sides: against women who wish to exercise the right, and for states (like Mississippi) that want to bar them from doing so.

And unlike Alito, they specifically sought to address the real-world implications.

The disruption of overturning Roe and Casey will therefore be profound. Abortion is a common medical procedure and a familiar experience in women’s lives. About 18 per cent of pregnancies in this country end in abortion, and about one-quarter of American women will have an abortion before the age of 45 . . . [P]eople today rely on their ability to control and time pregnancies when making countless life decisions: where to live, whether and how to invest in education or careers, how to allocate financial resources, and how to approach intimate and family relationships.

They warned of the fragility of constitutional protections.

The American public, they thought, should never conclude that its constitutional protections hung by a thread — that a new majority, adhering to a new “doctrinal school”, could “by dint of numbers” alone expunge their rights.

Supreme Court justices often conclude their dissents by saying they “respectfully dissent” or, to hit a stronger note, that they simply “dissent”. On Friday, the court’s liberal bloc dissented “with sorrow”.

With sorrow — for this court, but more, for the many millions of American women who have today lost a fundamental constitutional protection — we dissent.

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US Supreme Court Overturns Roe Vs Wade in Major Blow to Abortion Rights

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The US Supreme Court has struck down Roe vs Wade, the legal decision that has enshrined the constitutional right to an abortion for nearly 50 years, in a dramatic ruling by the court’s conservative majority that will shake up American society, politics and jurisprudence for years to come.

In the decision authored by Justice Samuel Alito, the justices of the Supreme Court upheld a state law in Mississippi that bans abortion after 15 weeks. They also went further, saying that the Roe vs Wade ruling of 1973 was incorrectly decided. The court’s three liberal justices dissented.

The court’s ruling was one of its most intensely anticipated in years — even more so after a draft of the majority opinion heralding its final decision to overturn Roe vs Wade was published by Politico in April, triggering a highly unusual probe within the institution into the leak. 

In denying a constitutional right to an abortion, the court has effectively given a green light for states to enact abortion laws that can be as restrictive as they wish. Several states run by Republican-led governors and legislatures have already passed laws that mean more restrictions on abortion will be automatically implemented if Roe is overturned.

The sweeping opinion in the Mississippi case was made possible by the appointment of three conservative Supreme Court justices during the presidency of Donald Trump, who secured their confirmation through the then Republican-led Senate. The court’s conservative majority is now so strong that it can afford to lose the support of Chief Justice John Roberts, who is considered a more moderate conservative, and still prevail in key rulings.

Earlier this year, the Democratic-led Senate confirmed Ketanji Brown Jackson, a liberal nominated by Joe Biden, to be a justice on America’s highest court. Since she is replacing Stephen Breyer, another liberal, her appointment will not affect the court’s balance of power.

The Supreme Court ruling on abortion was released with less than five months to go before November’s midterm elections, and may alter the political dynamic heading into the vote, though it is unclear whether it can overpower the impact of high inflation and economic perceptions as a factor for voters.

With polls showing that a majority of Americans opposed to overturning Roe vs Wade, Democrats are hoping that the ruling will trigger outrage, mobilise its base, and attract moderate swing voters who will see Republican positions on the issue as increasingly extreme.

But Republicans believe that disappointment with Biden’s handling of the economy, and high consumer prices, particularly for food and petrol, will still carry the day and give them a strong chance of recapturing control of the House of Representatives and possibly even the Senate. 

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