Former store owners in court battle with bank

Couple say they were reassured by adviser that they would not lose their home

The former owners of McEwens of Perth are taking Royal Bank of Scotland to court claiming they were misled into putting their house up as security for the failing business.

Lady Georgina Bullough – the daughter of the late Earl of Mansfield – and her husband John signed three personal guarantees totalling £1.75 million with RBS.

They claim they were told by an RBS adviser it was “just a box ticking exercise, the bank will not take your home”. After McEwens collapsed in 2016 with debts of almost £4.3m, RBS demanded the Bulloughs pay the money still outstanding or face losing their home.

The Sunday Post reported the couple have now gone to the Court of Session to ask for an interdict to stop RBS taking possession of Logie House in Perthshire and reduce their guarantees.

RBS said: “The bank believes it has a strong defence to these claims and will contest them vigorously in court.”

The family banked with RBS and forged a “close” bond with Ken Anderson, their designated relationship manager.

The company had to be refinanced in January 2008 when John and Lady Bullough took over after a management buyout facilitated by a firm called McEwens Direct. The couple “expressed their unease” to Mr Anderson after being asked to sign a £750,000 personal guarantee, used to help business owners secure finance by agreeing they will pay if the firm defaults.

The Bulloughs claim they were reassured by Mr Anderson the bank would not take their home, which had been given as security.

The court papers state: “The signing of the first personal guarantee was not ‘just a box-ticking exercise’ as part of the management buyout but an important matter that exposed the pursuers to personal risk in the event of the group’s default.”

Mr Bullough claims he would not have signed the first personal guarantee if he had realised the risk but would have renegotiated the management buyout.

Soon after the buyout, McEwens of Perth started suffering “financial pressures” because its overdraft had been reduced and turnover fell by £1m in the winters of 2009 and 2010.

The bank asked the Bulloughs to sign a second personal guarantee of £100,000 in October 2010.

McEwens breached its loan covenants to RBS in 2010 so the bank transferred the company to its Global Restructuring Group, which cancelled long-term financing arrangements and converted its borrowing to short-term facilities.

McEwens went into administration in March 2016. Administrators KPMG said it owed £3.44m to RBS.

The flagship store in Perth and a second property owned were sold for a combined £675,000 in March and the bank demanded payment of guarantees plus interest and told the Bulloughs if they failed to pay, it they would seek their property used as security.

The couple have offered to pay the second guarantee of £100,000 but claim they are entitled to a decree of reduction on the others.

John Bullough, former owner of McEwens department store in Perth. He and his wife Lady Georgina Bullough are taking Royal Bank of Scotland to court over guarantees.