Bankrupt gets 9 year bankruptcy restriction for giving false information
Stuart Edwin John Beare has given a nine year bankruptcy restrictions undertaking for providing false information to a finance company in respect of his assets and for acting in the management of a company whilst bankrupt.
Mr Beare’s restriction follows an investigation by the Insolvency Service.
Mr Beare (72) undertook to be bound by the restrictions set out in law, until January 2024. In particular, Mr Beare cannot manage or control a company during this period without leave of the court.
The investigation found that in 2007, Mr Beare provided a personal guarantee, limited to £500,000, to a finance company, in order for a company, of which he was a director and which was subsequently wound up with no assets - to obtain a significant loan. As part of the loan application process, Mr Beare was required to provide a list of his personal assets. The list which he provided included the family home, which at that time he estimated to have a net value of £225,000.
The statement of assets provided to the finance company in 2007 proved to be false. This resulted in a call upon Mr Beare’s personal guarantee and the finance company petitioning for his bankruptcy. Despite being bankrupt, he then made similar applications as a director of another limited company.
Mr Beare subsequently stated that he had transferred his interest in the family home to a relative in 2006. The finance company confirmed that they would not have granted the loan had they been aware of the property having been transferred prior to the personal guarantee being given.
The investigation also found that; following the making of his bankruptcy order, on 28 January 2014, Mr Beare had acted in the procurement of finance for a limited company of which he was a director, and dealt with the company’s financial affairs at a time whilst he was bankrupt, which he was prohibited from doing.
Commenting on the case, Laura Pacey, Deputy Official Receiver for Birmingham said;
Company directors should be aware that the law prevents them from acting in this way, and that if they disregard the legal provisions which attempt to protect financial institutions, the Insolvency Service will take enforcement action against them.
Notes to editors
Stuart Edwin John Beare lives in Alcester, Warwickshire. His date of birth is 20 May 1942.
The bankruptcy petition was presented on 2 September 2013 and the Bankruptcy Order was made on 28 January 2014.
After the making of his bankruptcy order on 28 January 2014, Stuart Edwin John Beare acted in the management of a company whilst bankrupt contrary to the provisions of Section 11 CDDA 1986.
The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice. Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.
If the Official Receiver considers that the conduct of a bankrupt has been dishonest or blameworthy in some other way, he (or she) will report the facts to court and ask for a Bankruptcy Restrictions Order (BRO) to be made. The court will consider this report and any other evidence put before it, and will decide whether it should make a BRO. If it does, the bankrupt will be subject to certain restrictions for the period stated in the order. This can be from 2 to 15 years.
The bankrupt may instead agree to a Bankruptcy Restrictions Undertaking (BRU) which has the same effect as an order, but will mean that the matter does not go to court.
There are restrictions set out in insolvency law that the bankrupt is subject to until they are discharged from bankruptcy – normally 12 months - and include that bankrupts:
- must disclose their status to a credit provider if they wish to get credit of more than £500
- who carry on business in a different name from the name in which they were made bankrupt, they must disclose to those they wish to do business with the name (or trading style) under which they were made bankrupt
- may not act as the director of a company nor take part in its promotion, formation or management unless they have a court’s permission to do so
- may not act as an insolvency practitioner, or as the receiver or manager of the property of a company on behalf of debenture holders;
- may not be a Member of Parliament in England or Wales
All public enquiries concerning the affairs of Mr Beare should be made to: The Official Receiver Birmingham, 4th Floor, 18 Priory Queensway, Birmingham, B4 6FD.
Published: 23 June 2015
From: The Insolvency Service