The court heard, and agreed, that Mr Chalk had dishonestly obtained a secured loan of over £200,000; had been involved in the management of a limited company while bankrupt and had failed to declare an asset worth £45,000 to the Official Receiver.
The allegations made out in court were that:
- On 28 April 2008, whilst insolvent, Simon Roger Chalk obtained £229,975 by providing false information to obtain a secured loan on his property when he knew that HM Land Registry (“HMLR”) had failed to register a previous charge over the property. Mr Chalk failed to pay the loan proceeds to the first charge holder, causing a loss to HMLR of £300,000. In comparison Mr Chalk paid at least £74,110 of the monies to an associated company;
- From 06 January 2009 Mr Chalk acted directly and indirectly in the management of a limited company, without the permission of a court, and in doing so breached his Bankruptcy Order;
- Mr Chalk failed to disclose an asset of £45,000 in his proposals for an Individual Voluntary Arrangement, which were accepted by his creditors on 22 January 2007. After the Bankruptcy Order was made against him on 08 December 2008, Mr Chalk failed to disclose the same asset to the Official Receiver.
Commenting on the order, Stephen Speed, Chief Executive of The Insolvency Service said:
“Mr Chalk wanted to benefit from the debt relief arrangements offered by the insolvency regime but was not prepared to accept the restrictions all bankrupts must abide by as part of that arrangement. The Bankruptcy Restrictions Order Mr Chalk is now subject to is a serious sanction and breaching it is a criminal offence which can result in a custodial sentence.”
Bankruptcy is one way of dealing with debts an individual cannot pay and give individuals the opportunity to make a fresh financial start, subject to some restrictions.
These are restrictions set out in insolvency law and a bankrupt is subject to them until their discharge from bankruptcy – normally 12 months.
An un-discharged bankrupt:-
- must disclose their status to a credit provider if they wish to get credit of more than £500;
- who carries 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.
Speaking after the case, Graham Horne, Deputy Inspector General for Official Receiver Services said:
“This case has been challenged at every opportunity. However the Official Receiver, on behalf of The Insolvency Service, was able to demonstrate to the court that Mr Chalk operated with a cynical disregard for the insolvency regime, from which he was benefiting, and for the creditors whom he deceived. The personal insolvency regime exists to provide relief to those who cannot pay their debts but as Mr Chalk has found out The Insolvency Service, in the public interest, will seek sanctions against those who abuse the system.”