Hegarty brothers face legal action

Derry property magnates Hugh and Patrick Hegarty face legal action to disqualify them from acting as company directors.

The brothers, whose property business collapsed with debts of almost £300m in the current recession, are the subject of a legal action being taken by the Department of Enterprise, Trade and Investment.

Patrick and Hugh Hegarty ran WG Mitchell, which was based in Derry but did most of its business in Scotland.

It was placed into administration after Royal Bank of Scotland demanded all its loans be repaid.

At one point, the company’s property portfolio was valued at upwards of £500m.

However, the property crash placed the firm under extreme pressure by 2009.

If a judge is persuaded by the department’s case, the brothers could be disqualified from being company directors for up to 15 years.

Last year, Patrick Hegarty was declared bankrupt in Scotland.

The Hegarty family began investing in property in Northern Ireland in the 1960s and built up a large portfolio of property in the throughout the six counties.

During the property boom, WG Mitchell joined a number of Northern Irish private investors in buying into the Scottish property market.

The company bought up hotels and other property and amassed assets worth more than £500m in under 10 years.

In Derry they owned a host of properties including the Richmond Centre and properties at Shipquay Street, Bishop Street, William Street, the Diamond and Clooney Terrace. The company also owned industrial units at Carrakeel Drive in Maydown and Victoria Road in Newbuildings as well as a 22 acre plot at Termonbacca near Nixons Corner.