Sir Frederick and Sir David Barclay’s controversial corporate raid on the hotel group behind Claridges has been dealt a severe blow after the last independent shareholder, Irish property developer Paddy McKillen, won the financial backing of US private equity group Colony Capital.

The shock move transforms McKillen’s stretched financial position, allowing him to restore more than €250m (£200m) of overdue borrowings within his broader property empire to financial health, supported by fresh loans from the $31bn US investment group.

It also pitches Colony – which co-owns Miramax and Fairmont Raffles Hotels with the Qatari sovereign wealth fund and others – against the Barclays in a major counter-challenge to their long-running battle for control of Coroin, the company that owns Claridges as well as The Connaught and The Berkeley hotels.

Colony already knows the hotel group well, having owned it jointly with Blackstone before it sold out to McKillen and fellow Irish investors in a 2006 deal heavily financed with bank debt, much of it from Anglo Irish Bank and Bank of Ireland.

Colony boss Tom Barrack yesterday said he had spotted a “mispricing opportunity” in McKillen’s overdue borrowings, which the Irishman had been unable to refinance for years. The investment group and the Irish property developer have written to the Barclay family indicating they want to buy its interest in Coroin. They have not received a reply.

A spokesman for the Barclays issued a short statement, saying “nothing has changed” except the name of lenders to McKillen.

For three years the Barclays – best known as owners of the Telegraph newspaper titles, the Ritz hotel and Littlewoods – have been stalking McKillen’s distressed loans, looking to acquire them from what was Anglo Irish Bank, the Irish lender nationalised in 2009 and last year transferred to liquidators.

Had the twins got hold of his borrowings, McKillen feared they would have immediately called them in default, forcing McKillen to hand control to the Barclays.

The long-running feud has seen McKillen spend millions in the courts challenging the Barclays’ corporate raiding tactics. Despite failing to persuade the courts that the twins had breached the terms of a Coroin shareholder agreement, McKillen has refused to sell out.

Recalling the moment he first discovered the Barclays had moved to take control of Coroin in early 2011, McKillen said: “I woke up one Monday morning and the Barclays said we own 64% of your company and we’re at your board table and you’re out on Friday.

“From day one it’s been certain: if it wasn’t an illegal attempt to get me out of the hotels it was an immoral attempt. It’s very disappointing what tactics and behaviour they’ve used. But they’ve got the lesson, certainly now, that I ain’t for moving. I’m here to develop the hotels.”

Up to now, his determination to stand firm had been underpinned by financial support from Qatari interests. It was financing from Qatar that ensured McKillen was able to find £50m to participate in a Coroin rights issue in 2012. Despite Qatar’s history of deals and co-investments with Colony, McKillen’s deal with the US investment house means the Gulf state is no longer involved in the battle for Coroin, the Irishman said.

McKillen remains the largest shareholder in Coroin, with just over a one-third share. The balance is split roughly evenly between an investment vehicle, acquired by the Barclays from the wealthy Green family in 2011, and another financially stretched Irish investor, Derek Quinlan, who has promised to sell his shares to Barclay interests.

While the brothers have effective control of Quinlan’s stake, the situation is finely balanced. Should Quinlan attempt to complete the share sale or be found to have defaulted on loans elsewhere in his affairs, the Coroin shareholder agreement requires that he must offer to sell his interest to his fellow investors.

It emerged in court proceedings that the Barclays had been bankrolling Quinlan, including his participation in the Coroin rights issue.

Sir Frederick Barclay, who had declined invitations to give evidence in person, sent the court a written statement, in which he claimed payments to the Quinlan family were made out of compassion for a friend in need. “My brother and I deeply resent the suggestion that we have been party to an unlawful conspiracy,” the statement said. “Helping the Quinlan family in their time of need was something that I will never regret and I would not hesitate to do it again if necessary, regardless of anything to do with Coroin.”

In his 2012 judgment, Mr Justice David Richards said he thought the Barclays were “aware of the commercial advantages to them if they did provide support to Mr Quinlan and his family”, but added that there was no evidence it was done as part of a deal tied to Coroin.

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Photo Credit: A room at Claridges Hotel in London. Claridges Hotel