Taggart brothers ordered to pay £8.5m after property empire collapse
Two brothers whose housebuilding empire collapsed in the property crash must pay a bank more than £8.5m in personal guarantees, a court ruled yesterday.
Michael and John Taggart were held to be liable for loans made |before their business went into |administration in 2008.
A Master at the High Court granted summary judgment to the Ulster Bank in two separate writs against the brothers for the sums of £5m and €4.3m (£3.5m).
Immediately after the ruling Michael Taggart confirmed he and his brother would appeal the decision.
Proceedings were brought over joint personal guarantees for borrowings by their companies Taggart Holdings Ltd in Northern Ireland and Taggart Homes Ireland Ltd in the Republic.
Much of the case centred on a dispute over whether or not these guarantees were temporary.
The brothers argued they did not have the benefit of legal advice before they signed.
In an affidavit Michael Taggart also stated that events surrounding his wedding in 2007 “created intense pressure which impaired my capacity to have time to reflect on the significance of the (first) guarantee”. He also claimed pressure was put on him to sign what he believed was a temporary arrangement.
Further issues were raised about the health of John Taggart, with the court told a significant |illness impacted on his ability to recollect relevant events.
The firm was a major success story during the property |boom, with the brothers believed to have amassed huge personal |fortunes.
Michael Taggart was responsible for group strategy, identifying opportunities and negotiating deals. His brother ensured building operations were up to standard.
In 2008 their business became one of the highest-profile casualties of the crash.
In his ruling, Master Bell set out concerns expressed by the Ulster Bank about “excessive overheads” involving offices in Belfast, Dublin and Manchester.
One affidavit stated: “The Taggarts themselves had a particularly lavish corporate lifestyle. I understand that Michael Taggart travelled by private helicopter, and I believe he had a dedicated pilot.”
Granting the summary judgment sought by the bank, the Master said: “I have also considered in connection with this application the issues in respect of wedding stress, health, and economic duress considered earlier.
“I do not find in any of these matters raised by the defendants sufficient material to conclude there is a fair or reasonable possibility of the defendants establishing that they have a real or bona fide defence in this action.”
The Taggarts, who have filed a separate multi-million pound lawsuit against the bank for allegedly acting prematurely when administrators were called in, will now seek to overturn the ruling.
Michael Taggart said: “This is by no means the end — in fact it's the beginning.”
Story so far
Taggart Holdings boasted a vast property empire across Ireland north and south, in t Britain and the Isle of Man. In 2007 Michael Taggart was named Ernst & Young |Entrepreneur of the Year. Property prices plunged as a result of the credit crunch |and the firm went into |administration in October 2008 when Ulster Bank and Bank of Ireland called in |debts thought to be around £300m, much of which was owed to contractors and |small businesses.