Insolvency Service
Printable version E-mail this to a friend

Ocean rower and property-developer, Simon Chalk handed five year bankruptcy restriction following Insolvency Service investigation

Ocean rower and property-developer, Simon Chalk handed five year bankruptcy restriction following Insolvency Service investigation

News Release issued by the COI News Distribution Service on 11 November 2010

Simon Chalk, an ocean rower, property developer (trading as Woodvale) and night-club owner today received a five-year Bankruptcy Restrictions Order at Torquay and Newton Abbot County Court following an investigation by The Insolvency Service.

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 breeching 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.”

Notes to Editors

In her judgment, District Judge Taylor identified Woodvale Challenge Limited to be both the recipient of £74,110 and the company directly or indirectly managed by Mr Chalk. She added: "this court finds on a balance of probability that the misconduct alleged has been found and even taking into account the circumstances of a very different economy that Simon Chalk has failed to meet proper standards required by individuals in the conduct of their financial affairs and that it is appropriate to make a BRO" In relation to the 1st allegation: "his actions fell below the standard of reasonableness and probity by not advising Barclays of the change in circumstances regarding monies and the charge, this led to a loss to HMLR of £300,000 but this could have been avoided firstly if HMLR had carried out their task of registration in the first place and if Simon Chalk had been forthcoming with the information. This is not a case where two wrongs make a right. Both HMLR and Simon Chalk were responsible for this loss but it would have never arisen if Simon Chalk had been open and honest in his dealings." 1 The Bankruptcy Restrictions Order was made in Torquay and Newton Abbot County Court on 11 November 2010 following inquiries by the Official Receiver’s Office, Exeter. A Bankruptcy Order was made against Mr Simon Chalk of Ashburton, Devon, on 8 December 2008. 2 What is the role of the Official Receiver? When a court has made an insolvency order (a personal bankruptcy against an individual or a winding-up order against a company) the Official Receiver, a civil servant of The Insolvency Service with wide ranging statutory powers to obtain information, is responsible for collecting and protecting any assets for the benefit of creditors. When the Official Receiver thinks there is cause to do so they can also investigate, in the public interest, the conduct and financial affairs of the bankrupt for the period leading up to the insolvency order being made. 3 When a bankruptcy petition is accepted by the court the Official Receiver looks closely into the applicant’s finances and can then apply to the court for a Bankruptcy Restrictions Order if there is evidence the bankruptcy was as a result of criminal activity, dishonesty or irresponsibility. If granted the order can last for between 2 and 15 years meaning the bankrupt will continue to have restrictions imposed on them. 4 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. The Service also 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 is available from http://www.insolvency.gov.uk 5 Media enquiries should be directed to: - Denise Rawls, Press Office Manager 020 7674 6910Ade Daramy, Press Officer 020 7596 6187

Contacts:

Denise Rawls.
Phone: 020 7674 6910
denise.rawls@insolvency.gsi.gov.uk

Ade Daramy
Phone: 020 7596 6187
ade.daramy@insolvency.gsi.gov.uk

Facing the Future...find out more