Ulster Bank made a "serious omission" when it failed to alert property developers Michael and John Taggart of changed arrangements for repaying multimillion euro borrowings, a bank executive has told a court.
Gary Barr accepted the brothers were not personally informed back in late 2006 about an alteration to the loan facility. His confirmation came as a legal battle between the Taggarts and the bank continued at the high court in Belfast.
The brothers are suing for alleged negligence and improper conduct which they say contributed to the fall of their house-building empire.
The Taggart Group had been a massive operation with developments on both sides of the Border and in Britain, with further interests in the United States but it was decimated when the property market crashed in 2007. A year later the company went into administration.
The brothers, from Co Derry, claim they were kept in the dark about credit concerns within the bank. Had they been warned, they contend, assets could have been sold to off-set loans.
In a counterclaim, Ulster Bank is seeking £5 million and €4.3 million it says the Taggarts owe in personal guarantees over land purchases in Kinsealy, north Co Dublin and in Northern Ireland.
Mr Barr was part of the bank's relationship management team dealing with the Taggart account prior to the firm's collapse. Under cross-examination by Gerald Simpson QC, for the brothers, he was questioned about lending arrangements linked to the Kinsealy scheme.
Repayment
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 from July 2007.
Mr Simpson 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.”
Pressed on his assessment of the scale of the alleged oversight, Mr Barr insisted the guarantors were “fully involved” with the company.
But according to Mr Simpson it was fundamental that the Taggarts should have been warned of the changes, given they faced a €4.3 million personal obligation.
“Do you accept it’s a very serious omission?” he asked.
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 added 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.
