A former property tycoon once named among Ireland's richest businessmen is exploring an eleventh-hour alternative to bankruptcy, the High Court in Belfast heard on Friday.
Michael Taggart and his brother John are facing petitions from Ulster Bank over debts running into millions of pounds. The pair, from Co Derry, were expected to be declared bankrupt at a hearing in Belfast, but a judge was told they are now examining the possibility of reaching an alternative resolution with creditors.
Based on insolvency advice, the brothers may put forward proposals for an individual voluntary arrangement (IVA), which involves a binding agreement to pay back outstanding debts, either in full or in part.
If any proposal is formalised, it must go before a meeting of all those owed money and approved by a significant majority before bankruptcy proceedings can be stopped.
Support
In court on Friday, it was disclosed that some other creditors may be in support of the alternative arrangement.
A lawyer representing Ulster Bank said she had just learned of the proposal.
“There were articles in the news where Mr [Michael] Taggart had acknowledged he was going to be made bankrupt this week,” she added.
Master of the High Court Fiona Kelly, who is presiding in the case, agreed to an adjournment so that any IVA application could be drawn up.
“Clearly the debtors here are well aware of the seriousness of the situation,” she said.
Proceedings were issued against the Taggarts after they lost a marathon multimillion pound legal battle with Ulster Bank. In November last year, a High Court judge in Belfast held the brothers liable for a €4 million personal guarantee over land purchases in the Republic. A second personal guarantee of £5 million (€5.7 million), linked to development in the North, also remains outstanding.
The brothers failed in their counter-writ, which claimed that the bank's actions contributed to the collapse of the Taggart Group.
Decimated
Once a huge operation on both sides of the Border, with further interests in Britain, Europe and the United States, the firm was decimated in the 2007 property crash. Within a year, it had gone into administration.
During a 30-day trial the court heard that the businessmen’s property portfolio once extended to a Luxembourg shopping centre and luxury apartments in Florida and on the borders of Monte Carlo.
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 insisted his company would not have gone bust if bank concerns had been disclosed sooner. But a judge ruled against him after describing his evidence in the case as being “flawed, inconsistent and implausible”.
