Article written by Bimal Kotecha, Solicitor
On 29 April 2022, tennis great Boris Becker was sentenced to two and a half years in prison for offences relating to his bankruptcy. This article highlights the potential severe consequences of a bankrupt individual concealing assets, dissipating assets and failing to disclose the true extent of their financial affairs.
In November 2019, Boris Becker received 12 years’ extended bankruptcy restrictions following the Official Receiver’s enquiries into assets and transactions valued in excess of £4,500,000.
Mr Becker was made bankrupt on 21 June 2017 in the High Court following a creditor’s petition that was presented against him. The bankruptcy order imposed a statutory duty to provide a full disclosure of assets to the trustee in bankruptcy and the requirement to inform lenders of a bankruptcy when seeking to borrow more than £500. The Official Receiver investigated undisclosed transactions occurring before and after the bankruptcy proceedings, totalling over £4.5m. Mr Becker offered a Bankruptcy Restrictions Undertaking, which was accepted on 17 October 2019 and lasts until 16 October 2031.
Under various provisions in the Insolvency Act 1986, Mr Becker was obliged to disclose all his assets so that his trustee could distribute available funds to his creditors. However, Mr Becker failed to disclose, concealed, and removed significant assets.
Mr Becker’s conduct led to his discharge from bankruptcy being suspended indefinitely and a criminal conviction on the following counts:
- Removing property totalling €426,930.90 from his bankruptcy estate (Count 4);
- Failure to disclose ownership of a property in Leiman, Germany (Count 10);
- Concealing a loan of €825,000 from the Bank of Alpinum of Lichtenstein (Count 13); and
- Ownership of 75,000 shares in Breaking Data Corp. (Count 14)
Mr Becker received 2 years and 6 months on count 4 on the indictment. He received 18 months, to be served concurrently on counts 10, 13 and 14 on the indictment.
Sections 353 to 359 of the Insolvency Act 1986 confirm that a bankrupt individual can face criminal liability if they:
- fail to disclose details of all property that forms part of their bankruptcy estate;
- conceal property that falls within the bankruptcy estate;
- remove any property their bankruptcy estate. It is only a criminal offence if the property removed is worth over £1,000;
- make a false or incomplete representations regarding the state of their affairs; and
- dispose of any property forming part of the bankruptcy estate.
Although it is rare for a bankrupt individual to be imprisoned resulting from their bankruptcy, in the above-mentioned instance there appears to have been a number of aggravating features, most particularly, removal and concealment of assets of substantial value in an attempt to keep them out of reach of creditors. This not only resulted in Mr Becker’s bankruptcy being extended (usually a bankrupt individual is discharged from bankruptcy after 12 months) but also led to the Insolvency Service prosecuting him on 24 charges.
This high-profile case not only highlights the wide-ranging powers the authorities have against a bankrupt individual, but it also demonstrates the importance of complying with the Official Receiver or Trustee in Bankruptcy and declaring all of your assets and creditors.
If you have been contacted by the Official Receiver or a Trustee in Bankruptcy requesting further information about you or a third party, please feel free to email me or contact the team on 020 8308 3610 for advice and assistance.