Belfast Telegraph

Ex-property tycoon Taggart brothers owe another €4m to Ulster Bank

By Alan Erwin

Former housebuilding tycoons Michael and John Taggart are liable for an additional €4m (£3.4m) personal guarantee to Ulster Bank, a High Court judge ruled yesterday.

Mr Justice Burgess' verdict in a dispute over land purchases in the Republic of Ireland follows a previous determination that the brothers owe another £5m.

He rejected allegations that the Taggarts were tricked into signing a revised arrangement for development in Kinsealy, north Co Dublin.

The judge said: "The defendants each knew directly full well of the decision regarding repayment, and did so from the time of the change right through to and including the taking of the second Kinsealy guarantee."

The Co Londonderry brothers have been locked in a marathon legal battle with Ulster Bank.

They issued a multimillion-pound writ for alleged improper conduct, claiming the bank's actions contributed to the collapse of the Taggart Group.

Once a huge operation on either side of the Irish border with further interests in Britain, Europe and the United States, the firm was damaged by the 2007 property market crash.

Within a year, it had gone into administration.

Michael and John Taggart insisted they could have sold off assets had they been warned of unease within the bank about the company's finances.

Ulster Bank issued counter-proceedings for €4.3m and £5m, which it contended the brothers owed in personal guarantees over land purchases in Kinsealy in 2006 and in Northern Ireland a year later.

During last year's trial in Belfast, the court heard how the businessmen's property portfolio once extended to a Luxembourg shopping centre and luxury apartments in Florida and on the borders of Monte Carlo.

Michael Taggart, who spent three weeks in the witness box, described his career path in the construction industry from purchasing a plot for one house to winning an entrepreneur of the year award.

He insisted that his company would not have gone bust if bank concerns had been disclosed sooner.

In mid-2007, Taggart Group had assets in the region of £600m, compared with debts of around £245m, the court heard.

However, counsel for Ulster Bank argued that the company was warned more than 20 times in the space of four months that its banking facilities were "bouncing into excess".

The court was also told a director at the construction group believed it was regularly getting itself into "financial messes".

In a first judgment delivered last December, Mr Justice Burgess dismissed the Taggarts' claim. He identified no deceit on the part of any bank official and threw out allegations that the brothers were kept in the dark about credit concerns.

At that stage, he held that the 2007 guarantee was both valid and binding, and owed in full by the Taggarts.

He also described Michael Taggart's evidence in the case as being "flawed, inconsistent and implausible".

Returning to the case to rule on the outstanding issues of the second Kinsealy guarantee, the judge determined:

n The brothers were intimately involved in every aspect of the Taggart Group's day-to-day business, financing and banking arrangements, including the facility for the Kinsealy purchase;

n Their personal knowledge would have been reinforced by a series of accountants' reports aimed at identifying the extent of the group's liabilities to the bank and the need for additional funding.

n The brothers were also fully aware the Kinsealy loan was outstanding before and at the time of the second guarantee being retaken.

"This was an agreement to which the defendants were party, with full knowledge of everything that was going on, and with their consent," the judge said.

"I am therefore satisfied that in the context of the changes that were made, the defendants had a continuing responsibility not only as surety... but (also) as primary obligor."

With the final figure reduced from €4.3m to €4.086m, Mr Justice Burgess confirmed: "I therefore find that the defendants are liable under the second Kinsealy guarantee."

Belfast Telegraph