Former house-building tycoons Michael and John Taggart owe Ulster Bank a £5 million personal guarantee, a High Court judge ruled on Friday.
Mr Justice Burgess held the brothers liable as he rejected their multi-million pound counter-writ for alleged negligence which they said led to the collapse of their property empire.
He described Michael Taggart’s evidence in the case as being “flawed, inconsistent and implausible”.
Finding no deceit on the part of any bank official, the judge dismissed claims that the brothers were kept in the dark about credit concerns.
He said: “It remains a mystery to the court as to why two highly-intelligent businessmen with seemingly considerable wealth, when faced with what in the scheme of their affairs were relatively modest financial demands to put right the covenants they entered into with the banks, did not take any steps to do so.”
Once a huge operation on either side of the Irish border, with further interests in Britain, Europe and the United States, the firm was hurt by the 2007 property market crash.
Within a year it had gone into administration.
The Co Derry brothers sued Ulster Bank for alleged improper conduct which they contended had contributed to the fall of the Taggart Group.
Michael and John Taggart insisted they could have sold off assets if they had been warned of unease within the bank about the company’s finances.
Ulster Bank issued counter-proceedings for 4.3m euros and £5m which it contended that the brothers owed in personal guarantees over land purchases in Kinsealy, north Co Dublin, in 2006, and in Northern Ireland a year later.
Assertions that the latter guarantee may have been unnecessary were rejected by the judge, who said the amount is “fully owed” by the brothers.
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.
In mid-2007 Taggart Group had assets in the region of £600m, compared with debts of around £245m, the court heard.
But counsel for Ulster Bank argued that the firm was warned more than 20 times in four months that its banking facilities were “bouncing into excess”.
Delivering a 145-page judgment, Mr Justice Burgess said any concerns had not arisen “out of the blue” in June 2007.
The judge described Michael Taggart as the dominant figure in the company, determined and ambitious - and with an intimate knowledge of the state of its business at all times.
He said it gave him no pleasure to categorise his evidence as “at times falling short of the truth, either by way of omission or more directly”.
Mr Justice Burgess continued: “It (the court) recognises the undoubted trauma and distress that the descent from great success to virtual ruin must have had on him and his family.
“The events occurred during a time of a febrile market in land and property - which with the benefit of hindsight was unsustainable, and I venture to suggest should have triggered alarm bells for anyone with any professional insight.”
Michael Taggart always seemed to lay the blame at the door of others, according to the judge.
In Mr Justice Burgess’ view the property boss needed a scapegoat - centring his accusations on senior Ulster Bank official Gary Barr.
Finding no evidence to back claims of deceitfulness, the judge instead said Mr Barr “went the extra mile” to help the Group through cash crises of its own making. He rejected the Taggarts’ claims about being kept in the dark.