Northern Ireland

Taggart Group: Ex-developer denies legal action 'inspired' by newspaper

Michael Taggart
Image caption Michael Taggart and his brother, John, are suing the Ulster Bank for damages

An ex-property developer has denied his multi-million pound lawsuit against the Ulster Bank was "inspired" by an American newspaper article.

Michael Taggart also rejected claims that he apparently failed to grasp a critical requirement for his firm to meet its tax obligations.

Mr Taggart and his brother, John, are suing the Ulster Bank for damages after they lost their business empire in the 2007 property price crash.

The bank is counter-suing the pair.

Cross-examination of the businessman continued on day seven of the High Court action in Belfast when he was asked about a Wall Street Journal report on builders suing banks in the US.

The story centred on claims that construction financing had been unfairly cut off.

According to a barrister for the Ulster Bank, Mr Taggart sent a copy to a legal adviser as a strategy for issuing proceedings.

"This is not a piece of social chitchat or gossip, it's not about some pop star... it's not some sports news or report," he said.

'Financial needs'

"The thrust of this piece is that there are builders in the United States who have started to bring litigation against banks, and the reason they are doing this is their claim that banks wrongly pulled finance away from them when they were in the process of constructing sites.

"You thought that was interesting when you read it, so interesting you saw fit to send it to your strategic legal adviser... and you now find yourself in bringing forward a multi-million pound suit against a bank in which you claim they have wrongly failed to support your financial needs."

He suggested: "This is the inspiration for the case you have brought, isn't that right?"

But Mr Taggart replied: "No. An inspiration would not be how I would describe it, (but) a very sad reality of what has happened."

Once classed among the richest men in Ireland, and the winner of an entrepreneur of the year award in 2007, the house-builder's firm was decimated in that year's property crash.

By 2008, the Taggart group, which had operations on both sides of the Irish border as well as Britain and the US, had gone into administration.

The Taggart brothers are locked in a multi-million pound legal action with the Ulster Bank.

They are seeking damages for alleged negligence and improper conduct they say contributed to the destruction of their business.

Had they been warned, they contend, plenty of assets were at their disposal which could have been sold to off-set loans.

Minutes

In a counterclaim, the bank has lodged writs for £5m and 4.3m euros it says the Taggarts owe in personal guarantees over land purchases in Kinsealy, County Dublin, and in Northern Ireland.

During Wednesday's hearing, the bank's barrister examined minutes from monthly Taggart group board meetings in 2006.

Items on the agendas included possible recapitalisation, cash flow, tax issues and bonuses.

According to the barrister, the phrase "carried forward" appeared on the records repeatedly.

"It's kicking the can down the road, isn't it?" he asked.

Mr Taggart insisted, however, that the papers showed some discussions took place.

The court heard that at meetings in October and November, Taggart's financial director referred to a critical need to meet tax obligations.

"He has to tell you that either because you and your fellow directors didn't know or understand that, or you weren't heeding him when he was stressing it," the barrister said.

Although the former company boss rejected his assertion, the barrister continued: "I want to suggest to you the reason he puts it not only in October but November, is because he has a persistent concern that this message is not getting through to you that there's tax to be paid.

"It's a large amount and its critical that it's met when it falls due, and he stresses it not once but twice because that's the way you were."

Mr Taggart replied: "I don't agree."

The case continues.

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