Colchester former nightclub owner gets 12 year bankruptcy restrictions for fraud
Richard Michael Phillips, unemployed and a former night club owner, has been handed a 12-year bankruptcy restriction by the High Court for dishonestly assisting another in a breach of trust by receiving and distributing £565,000, the proceeds from the fraudulent sale of a property.
In subsequent proceedings brought by the defrauded buyers, Mr Phillips agreed to pay them £75,000. This sum was not paid and thus the debt has materially contributed to his bankruptcy. Mr Phillip’s restriction follows an investigation by the Insolvency Service.
The bankruptcy restrictions order made in the High Court on 12 June against Mr Phillips (64) means that he will be 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 2027. In addition, he cannot manage or control a company during this period without leave of the court.
A bankruptcy order was made against Mr Phillips on 18 February 2013, following the presentation of a petition made by the liquidator of Mr Phillips former limited company as a result of the liquidator’s investigation into the company’s affairs, and his total deficiency was £1.8m of which £1.69m was owed to the liquidator.
The court heard that on 9 June 2011 Mr Phillips received the proceeds from a fraudulent sale of a property of £565,000, and in just over a week had distributed them to various parties and made large withdrawals of cash. He also paid £98,000 to a family member the day after receipt. A further £200,000 was paid to a third party company and then withdrawn in cash by Mr Phillips and others on 14 June 2011.
The fraud was discovered by the defrauded buyers of the property and on 16 June 2011, the solicitors for the buyers asked Mr Phillips for the return of the money, which he failed to do. He was made party to Court proceedings by the defrauded parties and these were stayed against him pursuant to a Tomlin order (that is the parties agreed to the order being made) for the payment of £75,000. The money was never paid and is included in the bankruptcy proceedings.
Notes to editors
The bankruptcy order was made on 18 February 2013, following a petition made by the liquidator of Mr Phillips’ previous company.
Richard Michael Phillips is of Colchester and his date of birth is 17 June 1951.
Mr Phillips was subject to a previous 7 year disqualification order made against him in 2009.
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.
These 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
Published: 9 July 2015
From: The Insolvency Service