Property developers Michael and John Taggart’s fight against being declared bankrupt centres on the firm that controls £1 billion of Nama loans in Northern Ireland, it emerged on Wednesday.
It was revealed in the High Court that the Co Derry brothers are challenging Promontoria Eagle's standing at a meeting where creditors rejected an alternative proposal. Dublin registered Promontoria Eagle, a subsidiary of US private equity giant Cerberus, was set up to manage the former Nama property loan book.
The Taggarts, said to have total debts of up to £213 million, are facing bankruptcy petitions brought by Ulster Bank. Proceedings were issued after the house builders lost a legal battle over their liability for millions of pounds in personal guarantees for land purchases and development on either side of the Irish border. Earlier this year the petitions were put on hold so Individual Voluntary Arrangement (IVA) proposals could be put to a meeting of creditors.
Creditors
An IVA involves a binding agreement to pay back at least some of the outstanding debts. A majority of creditors must vote in favour of the plan before bankruptcy proceedings can be stopped. It was disclosed at that stage that the total amount owed to unsecured creditors was £213 million, with liabilities to Ulster Bank assessed at around £11 million. The alternative resolution involved payments of 0.03 pence in the pound. At a previous hearing it was confirmed that the proposal was rejected by a majority of creditors.
However, the Taggarts began moves to challenge a decision by the chairman of the meeting to accept the outcome of the ballot. Counsel for the brothers raised issues over the standing of a creditor he did not name at that stage. He contended that the proposal would have been approved without their inclusion in the vote. But in court on Wednesday Bankruptcy Master Fiona Kelly disclosed the identity of the firm. She said: "The Taggarts own challenge (relates) to Promontoria Eagle." A lawyer representing Ulster Bank responded that her client had been happy with the outcome of the vote. She indicated, however, that it will be contesting the standing of other creditors to counter the Taggarts' move. Adjourning proceedings, Master Kelly listed the case for a further review in June.
Interests
The brothers have been locked in litigation with the bank for several years. As part of the legal battle they unsuccessfully claimed the its actions contributed to the collapse of the Taggart Group.
Once a huge house-building operation on either side of the Border, with further interests in Britain, Europe and the United States, the firm was decimated in the 2007 property market crash. Within a year it had gone into administration.
Michael Taggart, who was at one time among Ireland's richest businessmen, 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".
