From tax inspector to high-rolling property investor, financier Derek Quinlan files for bankruptcy in London

:: Former owner of Claridge’s entered Nama in 2009 with €3.5bn debt

Derek Quinlan

Jon Ihle

November 24 2022 02:30 AM

Celtic Tiger-era real estate investor Derek Quinlan has filed for bankruptcy in a London court nearly 13 years after entering Nama with an estimated €3.5bn in property debt.

The financier, who was a magnet for celebrity investors seeking to get rich in the years before the 2008 crash, became one of Ireland’s wealthiest men through a series of major property deals fuelled by heavy borrowing.

His seemingly magic touch on high-profile syndicated deals for marquee buildings such as Claridge’s hotel in London attracted the likes of TV personality Gay Byrne and Riverdance creators John McColgan and Moya Doherty.

Former AIB chair Dermot Gleeson and stockbroker Kyran McLoughlin were also among well-known contributors to Mr Quinlan’s leveraged investment vehicles, which snapped up real estate assets all over Europe in the 2000s. Attracted by his refined good taste, the great and the good of Irish society followed him first into great success and then into catastrophic failure.

Like many investors of the time, Mr Quinlan amassed enormous personal and business borrowings to finance the numerous acquisitions he made on the way from his first job as a Revenue tax inspector to property tycoon.

These debts ultimately proved his undoing and Mr Quinlan was Nama’s biggest debtor when it was set up in 2009 to recover billions in bank losses on dud property developments bankrolled by Irish lenders.

Forced into a series of humiliating asset sales in the agency’s early years, Mr Quinlan got out from under about €3bn of his debts by 2014.

This was achieved through the liquidations of personal properties in Dublin, London, New York and the French Riviera alongside the sale of loan notes on major assets such as the Maybourne Hotel Group, which owns Claridge’s and the Knightsbridge estate in London.

But there were still significant tranches of unpaid debts, such as €75m originally loaned by Royal Bank of Scotland (RBS) but later acquired by Edgeworth Capital, an investment fund owned by Robert Tchenguiz.

Edgeworth had acquired a portion of Mr Quinlan’s debt related to his €1.9bn purchase of Banco Santander’s office complex in Madrid with funding from RBS – at the time the biggest property transaction in Europe.

The financier, unable to come to an arrangement with Edgeworth or to afford to pay for his defence against bankruptcy proceedings initiated by the firm, petitioned the court to be declared bankrupt.

Edgeworth has been seeking to force Mr Quinlan into bankruptcy since 2019 and successfully scheduled a hearing on the matter last month.

Mr Quinlan (75) said in a statement that Nama’s refusal to settle his dealings with the agency had left him unable to restart his career and therefore unable fund his defence against Edgeworth’s action.

“Accordingly, I was left with no option but to apply to the court to ask that it exercises its discretion to make a bankruptcy order against me,” the statement said.

“However, it should be emphasised that I am not acceding to Tchenguiz’s bankruptcy petition and the purported petition debt; and the grounds upon which the petition has been presented remain disputed.”

Mr Quinlan said he had worked with his bankers since 2009 to discharge more than €3.8bn in personal and other debts, but had not been able to settle with Nama despite the agency having recouped €3.1bn.

He said that figure represent “hundreds of millions of profit” on debt that had been acquired by the agency at a significant discount and sold on “at the wrong time”.

“These were principally prime real estate assets in London that Nama could have sold for several hundreds of millions more if they had waited,” he wrote.

“Had Nama waited to sell the assets, my debts would have been repaid in full with a significant surplus.”

Nama declined to comment on the matter.