Press release

Bankrupt Loughborough dentist gets a 14 year bankruptcy restriction order after extracting £1.6m from patients and others by false representations

Dr John Edward Hammond (67), previously trading from Park House Dental Practice in Loughborough was ordered by Leicester County Court to be bound by the restrictions set out in bankruptcy for an extended period of 14 years for taking and misusing money from investors where there was little or no prospect of recouping that investment.


Dr Hammond, is therefore bound by the restrictions set out in insolvency law that a bankrupt is subject to until they are discharged from bankruptcy – normally 12 months – until 2029. In addition, he cannot manage or control a company during this period without leave of the court.

A bankruptcy order was made against Dr Hammond on 11 September 2013, following a private investor’s application, and his total deficiency was £6.6m of which £4.8m related to personal loans.

Following an investigation by the Insolvency Service, it was established that in 2010 Dr Hammond owed £3m in capital to private lenders with agreed annual interest rates of 10-15%. At the time his income was insufficient to maintain the interest payments of approximately £300,000.

The court heard that between 2010 and 11 September 2013, Dr Hammond secured further lending from 63 private investors totalling £1.6m by giving a variety of false representations as to the purposes of the loans being obtained, the value of his assets and why and how he would be able to repay them.

It was established that the loan funds of £1.6m were principally used to pay interest and capital on his pre-existing loans, to purchase 1% of shares in a new company venture and to financially assist an insolvent model railway company of which he was director.

Commenting on the case Alan Draycott, the Official Receiver for Nottingham said:

Dr Hammond took money from individuals (some of which were their life savings) and didn’t appraise them of the full facts of how the funds were to be utilised. In some cases, the individuals were told their funds were to be invested in property purchases that never took place. In fact, a portion of the funds were utilised to prolong the trading of an insolvent company of which Dr Hammond was sole director. Had the private investors been informed of the true purpose of the loans, they may not have decided to risk their savings. Dr Hammond was a high standing member of the community and abused his position of trust.

These proceedings should serve to protect the public from any future misconduct by restricting Dr Hammond from obtaining credit and acting in the management of a company. The period of the restriction is in the top bracket (the maximum being 15 years) to reflect the seriousness of the case and the high level of victims that have suffered a loss.

Notes to editors

The bankruptcy order was made on 11 September 2013, following a petition presented on 25 March 2013.

Dr John Edward Hammond’s date of birth is 2 April 1947.

The order was pronounced by DJ Carter at Leicester County Court.

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

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.

Published 26 March 2015