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