A Highland hotel boss launched a £100 million lawsuit after reading emails in which staff from a major bank accused him of having an “islander mentality”.
Macdonald Hotels Ltd (MHL) – which owns hotels and resorts across Scotland, including Aberdeen, Aviemore and Inverness – was embroiled in a dispute with Bank of Scotland when the emails came to light.
Chief executive officer Donald Macdonald believed the bank had exerted undue pressure on his company to sell properties, but regarded the insults as the last straw.
In one email, a bank representative said of Harris-born Mr Macdonald: “We need to speak to him using his own islander mentality and not take any s**t from him.”
Another staff member from the bank suggested he was like “Bonnie Prince Charlie” fighting London.
MHL, which runs the Macdonald Aviemore Resort, Norwood Hall in Aberdeen and Pittodrie House near Inverurie, borrowed money from Bank of Scotland, owned by Lloyds Banking Group.
The hotel chain struggled to balance its books in the 2010s due to tough trading conditions and so sold some properties around 2019.
Hotel group wanted £100m
But MHL claims Bank of Scotland pressured it to sell those properties rather than pursuing alternatives.
It argues that Bank of Scotland was not impartial because it was a lender to MHL and its subsidiary, Uberior, was a shareholder.
Bank of Scotland denied the allegations and said they were “serious but baseless”.
A 13-day court case recently took place in the High Court in England.
MHL had originally hoped for an award of around £100m, but changes to the nature of the case during the court hearing could reduce any award the judge decides to make to tens of millions of pounds.
During the court case, MHL representatives argued that the hotel chain had a collaborative relationship with the Bank of Scotland up until 2009, when HBOS sold Bank of Scotland to Lloyds.
MHL’s closing argument read: “The collaboration, which had been the hallmark of the pre-2009 relationship, gave way to the ‘more robust’ approach to dealing with MHL that Bank of Scotland resolved to take.
“This came to colour how Bank of Scotland came to view MHL.”
‘We need him absolutely corralled’
It is understood that, at some point during discussions between the hospitality firm and Bank of Scotland, MHL got sight of internal discussions between Bank of Scotland staff and their associates.
In the court papers, MHL gave one example of an email from a Bank of Scotland employee named Alasdair Gardner in February 2015 in which he said: “We need to have [Mr Macdonald] absolutely corralled.”
Mr Gardner added: “We need to speak to him using his own islander mentality and not take any s**t from him.”
The following month, Bank of Scotland employee Matt Bentley said he sought to adopt a “direct tone” with MHL.
Mr Bentley added: “That’s what is required with these people.”
In another email, the then Uberior director Bruce Anderson wrote: “There is a touch of Bonnie Prince Charlie here – principled prince from the Western Isles fighting for what is rightfully his against the tyrant and not supportive London based guys”.
In another email, Peter Opperman, who was chosen by Uberior to act as a non-executive at MHL, called Mr Macdonald “the enemy”.
Lloyds said Mr Opperman was speaking independently.
When these emails came to light, Mr Macdonald was offended to read what they had been saying about him – particularly because it made reference to his place of birth.
Straw that broke camel’s back
It is understood he viewed the “islander mentality” comment as the straw that broke the camel’s bank in terms of his decision to bring court action.
Mr Macdonald – who is also currently taking legal action against Highland Council over its flood relief scheme – also expressed regret that the matter could not be settled outside of court and said it was “extraordinary” that a 13-day hearing was needed to settle the dispute.
We asked Lloyds, which owns Bank of Scotland, if it was common for their staff members to talk about clients in this way or if it had reviewed its internal communication policy in light of the revelations.
A Lloyds Banking Group spokesperson said: “We do not believe that the claim has any merit, and dispute MHL’s claim.
“As the proceedings are yet to conclude, it would be inappropriate to comment further at this stage.”
He also pointed us to eight pages of closing arguments made in court on its behalf.
In those closing arguments, Bank of Scotland’s representative said: “The bank agrees that it is extraordinary that we are here.
‘Claim should never have been brought’
“We are not here because MHL’s claims are good ones.
“The claim should never have been brought.
“MHL cannot have thought that the case would ever actually get as far as trial.
“This may explain why the case was never properly pleaded or evidenced and why very many of the serious allegations that MHL did see fit to plead have been abandoned along the way.
“These proceedings are not an opportunity for MHL to ventilate every unfounded gripe and grievance raised with the Bank over more than a decade.
“All of the bank’s witnesses rejected any suggestion that MHL had been treated in any way unfairly or that its affairs had been mishandled.”
The judge in the case, Judge Pelling, is now considering his decision and is set to give his conclusion in the new year.
The losing side must pay both sets of legal costs.
High-profile firm in Highlands
We reported in September that MHL, which also runs Drumossie in Inverness, and Pittodrie House Hotel near Inverurie, lost £3.8 million for the year ending September 28 2023, compared with a £44.4m profit in 2022.
Bathgate-based MHL is one of the UK’s largest independent hotel groups.
Its portfolio boasts many operations in the Highlands, where it is one of the biggest ratepayers and employers.
These include Aviemore Resort, comprising of Morlich Hotel, Aviemore Hotel, Highlands Hotel and woodland lodges.
Macdonald’s Spey Valley Resort, in Aviemore, Lochanhully Resort, in Carrbridge, and Ness Side Estate, near Inverness, all offer self-catering accommodation.