Taggart prepares to take on bank's might in courtroom battle
Once one of Ireland's richest men, now facing bankruptcy, he says Ulster Bank 'took out' his building firm, writes Greg Harkin
HE had it all. An estimated 'Rich List' fortune of €140m, more than 50 development sites throughout Ireland, Britain, Europe and the USA and hundreds of people working for him.
His companies consistently pulled in €150,000 profit per week every week for 20 years and had assets of €780m, with borrowings of €300m.
But next month, Michael Taggart, 2007 Ernst & Young Entrepreneur of the Year, will take the stand in court in the latest astonishing twist in a legal battle with Ulster Bank which could spark a full-scale inquiry into the institution's practices here in Ireland.
The case is complicated and complex, but essentially it rests on an Ulster Bank 'workout' of Mr Taggart and his brother John which began in 2007 and whether or not the Taggarts had breached the terms of loans.
The Taggarts say they were well within the loan-to-value agreements, with assets to spare, when the bank moved in. A report from auditors KPMG proves this, they say.
Ulster Bank, of course, sees it differently and has vigorously pursued the Taggart brothers.
Central to the case is whether or not two personal guarantees signed by the Taggarts are valid. That's the money the bank wants.
In 2005, the Taggarts paid €19m for land at Kinsealy, Malahide in north Co Dublin.
The bank claims that the farmer's sons from Co Derry signed a personal guarantee on that investment to the tune of €4.3m.
But the brothers insist this was paid off by June 2007 and that when they signed a raft of documents six months later they didn't realise that guarantee had been resurrected or signed.
Ulster Bank went to court in Belfast and won summary judgement against the Taggarts for this and a second stg£5m (€6m) personal guarantee over property in the North.
The Taggarts appealed and 18 months ago Mr Justice Bernard McCloskey set both judgements aside and ordered a full new hearing into the cases and commented on claims by the Taggarts that €22m they claim to have paid Ulster Bank had simply vanished.
The Taggarts claim that they reduced their overdraft facility with Ulster Bank from stg£41m to less than stg£3m.
In his judgement, the judge noted that the Taggart brothers had been described in the Sunday Independent in 2006 as "the richest people in the country".
He also noted that the Taggarts had contended during the hearing "that there is, as a minimum, a possible unexplained shortfall of some stg£18m in repayments allegedly made by them to the plaintiffs (Ulster Bank) – some stg£39m versus around stg£21m".
The judge said his view did not attempt to make conclusive findings and that only a full hearing "will enable the court to assess the veracity of witnesses and to make confident findings of fact".
He said that a future hearing would be "a veritable goldmine for cross-examination".
Michael Taggart, the man who introduced turn-key homes to Ireland, maintains that Taggart Holdings was "taken out" by Ulster Bank, a subsidiary of Royal Bank of Scotland (RBS).
The bank has consistently denied this through a seemingly endless legal dispute.
"Our developments were pre-sold and de-risked," Mr Taggart told the Sunday Independent.
"Most have since been built and sold."
If he loses the case, the father of four faces bankruptcy.
"My name was dragged through the gutter," he said.
"[After the collapse of Taggart Holdings] huge estimates were put on the 'losses' and I've spent the past seven years fighting all those claims and earning money to pay the costs of the case.
"There is no doubt in my opinion that Taggart Holdings would not just have survived the property downturn, it would still be trading today and doing well.
"Our former sites in Belfast are either built or under way and in Manchester, for example, they are all sold.
"The stress of losing your business can be all-consuming. It's hard, hard going. But I've always believed in fighting for what you believe in and that's why I've devoted every spare moment of the past seven years to the case [against Ulster Bank]."
Last Monday morning, Mr Taggart read the official report from Lawrence Tomlinson, special adviser to Britain's Secretary of State for Business Vince Cable.
In it, Tomlinson claimed that Ulster Bank's parent company RBS deliberately put "good and viable" businesses into default so it could make more profits.
The Yorkshire businessman said the bank used its Global Restructuring Group (GRG) to do this, generating revenue for the bank through fees, increased profit margins and the purchase of devalued assets by its property division, West Register.
Since the report was published, Tomlinson says he has received another 250 complaints from businesses.
The Sunday Independent understands that some of those are from people living in the Republic.
Michael Taggart says he is just one of them.
"I've asked that Mr Tomlinson extend his investigation to Northern Ireland and while he wouldn't have jurisdiction in the Republic it is essential that a similar inquiry takes place south of the Border," he says.
The 46-year-old hasn't been idle since the collapse of his property empire.
And he's about to start again.
"I'm going back into housebuilding," he says.
"I have the investors in place and there are opportunities on the road ahead.
"I sit on the board of several companies and I'm really enjoying that."
On January 13, 2014 Ulster Bank versus Michael and John Taggart for the payment of personal guarantees – Michael and John Taggart v Ulster Bank seeking €120m in damages – gets under way at the High Court in Belfast.
It won't be dull.