The twin brothers David (left) and Frederick Barclay (right) – social climbers who have to fight for their fortunes throughout their lives. picture alliance / Photoshot | –
The story of the Barclay twin brothers was long considered a rising star in Great Britain. David and Frederick Barclay started out as craftsmen, went into real estate and built an empire.
But the brothers financed a large part of their acquisitions through debt. This caught up with the family, who took their conflicts to court.
After selling the Ritz in London, the Barclay family is now trying not to lose the Telegraph.
At just 15, David and Frederick Barclay left school to work as accountants and painters and then built an empire of hotels, breweries and media. But the Barclays’ life’s work is in danger: the Barclays family is said to have more than a billion pounds in debt. That could mean the loss of one of the most influential magazines in Britain, reports the „Frankfurter Allgemeine Zeitung“ (FAZ).
Assets financed through credit
But back to the brothers’ beginnings: David and Frederick Barclay were born in London in 1934. In the 1960s, the twins entered the real estate business and eventually bought The Ritz luxury hotel in the British capital in 1995. According to the “FAZ”, the hotel purchase cost them 75 million pounds (around 87 million euros). In 2004, another dazzling acquisition came: the brothers took over the media group “Daily Telegraph” for 665 million pounds (around 770 million euros), as the “Financial Times” (FT) reports. But where did the brothers get the money for these expensive investments?
Barclays finances many takeovers with loans. This will catch up with the family later: they are now heavily in debt.
Barclays now owes £1.1 billion to Lloyds Banking Group alone
The Barclay twins spent ten years negotiating the restructuring of their debts with the Lloyds banking group. In 2020 they have to sell The Ritz to a Qatari investor for 750 million pounds (around 867 million euros). But neither the Lloyd Group nor Barclays get much out of it – because, according to the FT, the debts of other lenders have priority.
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Family conflicts end in the courtroom
Bizarre accusations and inheritance disputes repeatedly bring the family to court. When David and Frederick’s father dies, the family fights over his inheritance and takes the dispute to the judiciary. If the Ritz is sold, Frederick is also threatening to sue because he believes the selling price is too low, according to the “FAZ”.
And there is also the accusation of espionage: Frederick and his daughter accuse David’s sons of having eavesdropped on them at the Ritz and are taking them to court. Thousands of private conversations are said to have been intercepted. Ultimately, Frederick received a settlement worth £800,000 and had to pay legal costs of £7.5 million when he dropped the lawsuit in June 2021 reports the Guardian.
Frederick is not only on trial with his nephews. His ex-wife Hiroko is also suing Barclay. The judge orders a divorce settlement of 100 million pounds (115.7 million euros) in 2021. During the trial it comes to light that Frederick has been cut off from the family fortune since 2014, reports the “FT”. When David dies in January 2021, he leaves behind a divided family.
What remains of the Barclay empire?
Despite the Ritz sale in 2020, the Barclays remain heavily in debt. After the debt restructuring attempts failed, the Lloyd Group decided to take a new approach: the banking group took possession of loan collateral in order to sell it on. In June this year The Barclays lose control of their “iconic”, the “Telegraph” media group. It is estimated that the sale of the media group could raise half a billion pounds (578 million euros), so die „FT“.
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According to the “FAZ”. The family is trying to buy back the “Telegraph” group or at least part of it through a donor from the United Arab Emirates. Whether the Barclays will succeed remains unclear.
And the family could lose more than just the Telegraph: investors are now also setting their sights on the rest of the Barclays empire, reports the “FT”. Trading and finance company Very Group was worth an estimated three to four billion pounds (3.5 to 4.6 billion euros) during the 2021 pandemic boom. Today the company is said to be worth less. With debts of £180 million and little equity, Barclays delivery company Yodel doesn’t promise much revenue either, so die „FT“.
Today, the once amazing and hard-fought Barclay rise is crumbling. Two brothers once built an empire, but for the remaining brother, now 88 years old, and the generations to come, collapse is looming ever closer.
AA
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