Taggarts bid to avoid bankruptcy rejected by creditors
Creditors rejected a proposal that would have seen former property tycoons Michael and John Taggart avoid bankruptcy, the High Court heard yesterday. But the Co Londonderry brothers, said to have debts of up to £213m, are set to contest the outcome of a meeting of people to whom they owe money.
A judge has given them 28 days to advance grounds of any challenge.
Ulster Bank is petitioning to have the Taggarts declared bankrupt over debts of several million pounds.
Proceedings were issued after the pair lost a marathon legal battle with the bank.
In November a High Court judge held them liable for a €4m personal guarantee over land purchases in the Republic.
A second personal guarantee of £5m linked to developments north of the border also remains outstanding.
The Taggarts failed in their counter writ, which claimed the bank's actions contributed to the collapse of the Taggart Group. Once a huge house-building operation, the firm suffered in the 2007 crash and went into administration.
Michael Taggart, at one time among Ireland's richest businessmen, insisted his company would not have gone bust if bank concerns had been disclosed sooner.
But a judge ruled against him, describing his evidence as "flawed, inconsistent and implausible".
Earlier this year the bankruptcy petitions were put on hold so Individual Voluntary Arrangement (IVA) proposals could be put to creditors.
An IVA involves a binding agreement to pay back at least some of the outstanding debts. A majority of creditors must vote in favour of the plan.
It was revealed at that stage that the total amount owed to unsecured creditors was £213m, with liabilities to Ulster Bank assessed at around £11m.
The alternative resolution involved payments of 0.03 pence in the pound.
In court it was confirmed that the proposal was rejected by a majority of creditors.
However, counsel for the Taggarts said he had been instructed to challenge a decision by the chairman of the meeting to accept the outcome of the ballot.
Raising issues over the standing of a creditor, he contended that the proposal would have been approved without their inclusion in the vote.
Bankruptcy Master Kelly agreed that the debtors had a statutory right to mount an appeal within 28 days, but added: "There would have to be very good grounds for the challenge."