Northern Ireland

Taggarts: Ulster Bank admits 'serious omission' over loan changes

Taggart Group building
Image caption The Taggart Group housebuilding firm, founded by brothers Michael and John Taggart, was decimated by the 2007 property crash

An Ulster Bank boss has admitted that failing to alert its customers when it changed their multi-million euro loan repayments was a "serious omission".

Gary Barr was giving evidence to the High Court in Belfast, in a case where the bank is being sued by two property developers, Michael and John Taggart.

The Taggarts claim Ulster Bank's alleged negligence and improper conduct contributed to their firm's collapse.

Mr Barr accepted the Taggarts were not personally informed of the loan change.

Michael Taggart and his brother John, from County Londonderry, were once among the richest people on the island of Ireland.

Credit concerns

They ran the Taggart Group housebuilding firm, which was decimated by the 2007 property crash.

At one stage, they were involved in property developments on both sides of the Irish border, Britain and further interests in the United States, but the Taggart Group went into administration in 2008.

The brothers claim Ulster Bank failed to inform them of its credit concerns about their housebuilding company in the lead up to the property crash.

They have argued that had they been warned, they could have sold their assets to off-set loans and save their business.

In a counterclaim, Ulster Bank is seeking £5m and 4.3 million euros (£3.3m) it says the Taggarts owe in personal guarantees over land purchases in Kinsealy, County Dublin, and in Northern Ireland.

Staff training

Mr Barr was part of the bank's relationship management team that dealt with the Taggart's account prior to the firm's collapse.

He was cross-examined by the Taggart's barrister about lending arrangements linked to the Kinsealy scheme.

The court heard how, by November 2006, there had been a change to the method of repayment.

Asked if there are any documents to show the brothers were informed at the time, Mr Barr said the only letter he had seen was dated July 2007.

The Taggarts' barrister put it to him: "May the court take it you never had it explained to you that if you're going to change the methodology of payment with respect to a borrowing facility, you should tell the guarantors?"

The banker replied: "I can't recall training of that nature before this point."

'Arguing'

The Taggarts' barrister said it was fundamental that his clients should have been warned of the repayment changes, given they faced a 4.3m euros (£3.3m) personal obligation over the Kinsealy land loan.

"Do you accept it's a very serious omission?" the barrister asked the witness.

Mr Barr answered: "I accept it's a serious omission."

"So the only word we are arguing about is 'very'," the barrister responded.

Mr Barr told the court that he believed no further discussions took place on that point about the repayment method during the rest of his time looking after the Taggart account.

The case continues.

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