Ulster Bank wins legal battle with Taggart brothers
Ulster Bank has won its long-running legal battle with the property developers Michael and John Taggart.
The bank was suing the pair to enforce more than £5m of loan guarantees.
The brothers, from County Londonderry, claimed the guarantees were invalid, and were counter-suing the bank.
A High Court judge said there had been no deceit on the part of any bank official. The Taggart brothers' house-building business went bust at the start of the property crash in 2008.
The Taggart Group had developments on both sides of the Irish border and Britain as well as interests in the United States,
During the case, 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.
'Inconsistent and implausible'
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 argued his company would not have gone bust if bank concerns had been disclosed sooner.
However, the judge held the brothers liable for the £5m personal guarantee, while rejecting their multi-million pound counter writ for alleged negligence that they claimed had led to the collapse of their property empire.
He described Michael Taggart's evidence in the case as being "flawed, inconsistent and implausible".
The judge dismissed claims that the brothers were kept in the dark about credit concerns.
"It remains a mystery to the court as to why two highly intelligent businessmen with seemingly considerable wealth, when faced with, what in the scheme of their affairs, were relatively modest financial demands to put right the covenants they entered into with the banks, did not take any steps to do so," he said.
Michael and John Taggart had claimed they could have sold off assets if they had been warned of unease within the bank about the company's finances.
Ulster Bank issued counter proceedings for 4.3m euros (£5.9m) and £5m that it said the brothers owed in personal guarantees over land purchases in Kinsealy, north County Dublin in 2006 and in Northern Ireland a year later.
Assertions that the latter guarantee may have been unnecessary were rejected.
The judge said: "I therefore determine that the 2007 guarantee is perfectly valid and binding, and that the amount due under it is fully owed to the banks by the Taggart brothers."
'Trauma and distress'
In mid-2007, Taggart Group had assets in the region of £600m, compared with debts of about £245m, the court heard.
However, a lawyer for the bank told the court how the firm was warned more than 20 times in four months that its banking facilities were "bouncing into excess".
The judge described Michael Taggart as the dominant figure in the company, determined and ambitious with an intimate knowledge of the state of its business at all times.
He said it gave him no pleasure to categorise his evidence as "at times falling short of the truth, either by way of omission or more directly".
The judge said the court "recognises the undoubted trauma and distress that the descent from great success to virtual ruin must have had on him and his family.
"The events occurred during a time of a febrile market in land and property - which with the benefit of hindsight was unsustainable, and I venture to suggest, should have triggered alarm bells for anyone with any professional insight."