It is not often that insolvency makes the headlines, but recent days have seen the sentencing of Boris Becker to two and a half years in prison. As Julie Andrews once sung, let’s start at the very beginning.
Boris Becker was adjudged bankrupt in 2017 following the non-payment of a £3million loan relating to a property in Mallorca. Following the making of the order, an insolvency practitioner was appointed trustee in bankruptcy with the duty of realising the assets and the Official Receiver had the responsibility of investigating his affairs. This work led to claims of assets not being declared (including the trophies for winning Wimbledon and an Olympic medal), as well as debts being hidden.
In 2018, in a surreal moment, Boris Becker declared diplomatic immunity against further attempts to pursue him over the debt. His lawyers said he was a sport and culture attaché of the Central African Republic, a claim subsequently dropped.
He was found guilty last week of transferring hundreds of thousands of pounds from his business account after his bankruptcy, failing to declare a property and an associated loan in Germany as well as concealing €825,000 of debt.
Whilst it is open to debate as to whether the sentence handed out is more severe or not (given the high-profile nature of the case) it does serve as a reminder of the powers in the Insolvency Act. The story of Boris Becker’s fall from one of the best tennis players in the world to a prison inmate also serves as a lesson to others who believe they can avoid disclosure. His finances were impacted through a combination of a reduction in earnings, divorce and child maintenance payments but his outgoings seem unchanged (for example he mentioned a £22,000 per month rent bill for a London house).
There are many reasons why individuals and directors alike will try and “Beat the system”. Experiencing financial difficulties creates stress and can lead to irrational decisions that may, ultimately lead to outcomes similar to that suffered by Mr Becker. The key to avoiding these issues is to seek early advice.
Should you or your business have an issue of financial difficulties following a shock (or for any other reason) then please contact a member of the Team at PBC Business Recovery & Insolvency on (01604) 212150 (Northampton office) or (01234) 834886 (Bedford office). Alternatively, you may send an email to email@example.com or access our website at www.pbcbusinessrecovery.co.uk