Boris Becker is JAILED for TWO YEARS and SIX MONTHS: Tennis ace is sent down over £700,000 bankruptcy fraud
Three-time Wimbledon champion Boris Becker was today sentenced for flouting the terms of his bankruptcy by hiding £2.5 million worth of assets and loans to avoid paying his debts. The 54-year-old former world number one tennis player was declared bankrupt in June 2017, owing creditors almost £50million over an unpaid loan of more than £3million on his estate in Mallorca, Spain. BBC commentator Becker, who is a father-of-four, transferred around £390,000 from his business account to others, including those of his ex-wife Barbara Becker and estranged wife Sharlely 'Lilly' Becker. He also failed to declare his share in a £1 million property in his home town of Leimen, Germany, hid a bank loan of almost £700,000 - worth £1.1million with interest - and concealed 75,000 shares in a tech firm, valued at £66,000. Becker, who got a two-year suspended sentence for tax evasion and attempted tax evasion worth £1.4million in Germany in 2002, was found guilty on April 8 of four Insolvency Act offences between June and October 2017. Each count carried a maximum sentence of seven years' imprisonment and Judge Deborah Taylor sentenced the six-time Grand Slam champion at Southwark Crown Court this afternoon.
Boris Becker is JAILED for TWO YEARS and SIX MONTHS: Tennis ace is sent down over £700,000 bankruptcy fraud
Three-time Wimbledon champion Boris Becker was today sentenced for flouting the terms of his bankruptcy by hiding £2.5 million worth of assets and loans to avoid paying his debts. The 54-year-old former world number one tennis player was declared bankrupt in June 2017, owing creditors almost £50million over an unpaid loan of more than £3million on his estate in Mallorca, Spain. BBC commentator Becker, who is a father-of-four, transferred around £390,000 from his business account to others, including those of his ex-wife Barbara Becker and estranged wife Sharlely 'Lilly' Becker. He also failed to declare his share in a £1 million property in his home town of Leimen, Germany, hid a bank loan of almost £700,000 - worth £1.1million with interest - and concealed 75,000 shares in a tech firm, valued at £66,000. Becker, who got a two-year suspended sentence for tax evasion and attempted tax evasion worth £1.4million in Germany in 2002, was found guilty on April 8 of four Insolvency Act offences between June and October 2017. Each count carried a maximum sentence of seven years' imprisonment and Judge Deborah Taylor sentenced the six-time Grand Slam champion at Southwark Crown Court this afternoon.
Boris Becker is JAILED for TWO YEARS and SIX MONTHS: Tennis ace is sent down over £700,000 bankruptcy fraud
Three-time Wimbledon champion Boris Becker was today sentenced for flouting the terms of his bankruptcy by hiding £2.5 million worth of assets and loans to avoid paying his debts. The 54-year-old former world number one tennis player was declared bankrupt in June 2017, owing creditors almost £50million over an unpaid loan of more than £3million on his estate in Mallorca, Spain. BBC commentator Becker, who is a father-of-four, transferred around £390,000 from his business account to others, including those of his ex-wife Barbara Becker and estranged wife Sharlely 'Lilly' Becker. He also failed to declare his share in a £1 million property in his home town of Leimen, Germany, hid a bank loan of almost £700,000 - worth £1.1million with interest - and concealed 75,000 shares in a tech firm, valued at £66,000. Becker, who got a two-year suspended sentence for tax evasion and attempted tax evasion worth £1.4million in Germany in 2002, was found guilty on April 8 of four Insolvency Act offences between June and October 2017. Each count carried a maximum sentence of seven years' imprisonment and Judge Deborah Taylor sentenced the six-time Grand Slam champion at Southwark Crown Court this afternoon.
I've dealt with a fair few of these. This is how it often happens:-
1. It becomes known that X has defaulted on £3million loan; 2. Every single Debtor of X refuses to pay a single penny they owe X 3. Every single Creditor demands payment immediately 4. Every single person who used to give X work stops doing so 5. The Company that X owns becomes worthless overnight 6. There is a fire sale of X's Assets at way less than they were worth last week 7. The liquidators/trustees in bankruptcy charge an absolute fortune in fees, dwarfing the Solicitors/Estate Agents/Forensic Accountants/Creditors solicitors etc 8. And hey presto-the £3million debt causes a £50 million debt
Boris Becker is JAILED for TWO YEARS and SIX MONTHS: Tennis ace is sent down over £700,000 bankruptcy fraud
Three-time Wimbledon champion Boris Becker was today sentenced for flouting the terms of his bankruptcy by hiding £2.5 million worth of assets and loans to avoid paying his debts. The 54-year-old former world number one tennis player was declared bankrupt in June 2017, owing creditors almost £50million over an unpaid loan of more than £3million on his estate in Mallorca, Spain. BBC commentator Becker, who is a father-of-four, transferred around £390,000 from his business account to others, including those of his ex-wife Barbara Becker and estranged wife Sharlely 'Lilly' Becker. He also failed to declare his share in a £1 million property in his home town of Leimen, Germany, hid a bank loan of almost £700,000 - worth £1.1million with interest - and concealed 75,000 shares in a tech firm, valued at £66,000. Becker, who got a two-year suspended sentence for tax evasion and attempted tax evasion worth £1.4million in Germany in 2002, was found guilty on April 8 of four Insolvency Act offences between June and October 2017. Each count carried a maximum sentence of seven years' imprisonment and Judge Deborah Taylor sentenced the six-time Grand Slam champion at Southwark Crown Court this afternoon.
The court heard Becker's bankruptcy resulted from a £3.85 million loan from private bank Arbuthnot Latham in 2013, and £1.2million, with a 25 per cent interest rate, borrowed from British businessman John Caudwell, who founded Phones 4u, the following year.
He said he was involved in an 'expensive divorce' with ex-wife Barbara in 2001, involving high maintenance payments to their two sons, and had to support his daughter Anna and her mother, in a deal which included the Chelsea flat.
Becker, who was resident in Monte Carlo and Switzerland before moving to the UK, said he had 'expensive lifestyle commitments,' including his £22,000-a-month rented house in Wimbledon, south-west London.
He also owed the Swiss authorities five million francs (about £4 million) and separately just under one million euros (more than £800,000) in liabilities over a conviction for tax evasion and attempted tax evasion in Germany in 2002.
Boris Becker is JAILED for TWO YEARS and SIX MONTHS: Tennis ace is sent down over £700,000 bankruptcy fraud
Three-time Wimbledon champion Boris Becker was today sentenced for flouting the terms of his bankruptcy by hiding £2.5 million worth of assets and loans to avoid paying his debts. The 54-year-old former world number one tennis player was declared bankrupt in June 2017, owing creditors almost £50million over an unpaid loan of more than £3million on his estate in Mallorca, Spain. BBC commentator Becker, who is a father-of-four, transferred around £390,000 from his business account to others, including those of his ex-wife Barbara Becker and estranged wife Sharlely 'Lilly' Becker. He also failed to declare his share in a £1 million property in his home town of Leimen, Germany, hid a bank loan of almost £700,000 - worth £1.1million with interest - and concealed 75,000 shares in a tech firm, valued at £66,000. Becker, who got a two-year suspended sentence for tax evasion and attempted tax evasion worth £1.4million in Germany in 2002, was found guilty on April 8 of four Insolvency Act offences between June and October 2017. Each count carried a maximum sentence of seven years' imprisonment and Judge Deborah Taylor sentenced the six-time Grand Slam champion at Southwark Crown Court this afternoon.
I've dealt with a fair few of these. This is how it often happens:-
1. It becomes known that X has defaulted on £3million loan; 2. Every single Debtor of X refuses to pay a single penny they owe X 3. Every single Creditor demands payment immediately 4. Every single person who used to give X work stops doing so 5. The Company that X owns becomes worthless overnight 6. There is a fire sale of X's Assets at way less than they were worth last week 7. The liquidators/trustees in bankruptcy charge an absolute fortune in fees, dwarfing the Solicitors/Estate Agents/Forensic Accountants/Creditors solicitors etc 8. And hey presto-the £3million debt causes a £50 million debt
Why didnt he sell the property referred to below at some point, even at a discounted price. The money he borrowed against it appears to be a small fraction of the value.
Humiliated' Boris Becker has 'nothing' to show for 'glittering' career Tennis legend Boris Becker has been left with nothing to show for his 'glittering' sporting career and will have to rely on charity to survive, his lawyer has said.
The three-time Wimbledon Champion, 54, was declared bankrupt in 2017 over a loan from private bank Arbuthnot Latham against his estate in Mallorca.
His barrister Jonathan Laidlaw QC said the bank now has the property, which Becker said was worth about 50 million euros (£42 million) at the height of the property market.
The court heard Becker's bankruptcy resulted from a £3.85 million loan from private bank Arbuthnot Latham in 2013,
Background
2. Arbuthnot Latham lent you money in connection with development of The Finca, a Spanish property that you owned in Mallorca. On 27 July 2016, after protracted attempts by you and various sets of advisers to negotiate a settlement or to raise money elsewhere to pay the debt, a Statutory Demand was issued by the bank for the outstanding sum. You contested those proceedings. On 30th August 2016, you submitted a statement in opposition to the Statutory Demand. On 12th April 2017 your application to set aside the Statutory Demand was dismissed, and leave was granted for Arbuthnot Latham to present a petition . On 28th April 2017 the Bankruptcy Petition was presented to the High Court for £3,348,582.57. Your application of 16 June 2017 resisting the order was dismissed and on 21 June 2017 the petition was heard at the High Court and the Bankruptcy Order was made.
Relevant evidence
3. On your own evidence at trial you had not at any stage before 21 June 2017 expected that the Bankruptcy order would be made. That was your position in the defence of the bankruptcy proceedings. Despite the failure of the attempts to contest the proceedings, your evidence was that you thought more time would be given for a “White Knight” to assist you, or for you to raise money which would enable The Finca to be sold at a proper market value such as would enable your debts to be paid off.
Out of interest , because i'm dumb with these sort of things , so now he's been sent down do all persons/banks whatever get nowt and once time served he starts from scratch with obvious restrictions ?
I expect it was as simple as the massive slump in the price of Property in Spain and Majorca, which has been ongoing since at least 2008. Prices may well be 30% lower than in 2008, and due to the massive economic downturn there, precious few buyers. "Proper Market Value"-nonsense. It is worth what someone is willing and able to pay for it. The "small fraction" relates to a different world.
If it really was as simple as his Counsel claimed, the Creditors would have just forced the Sale of the Property. It was not that simple-hence the Stat Demand.
And if Mr Becker genuinely did not believe that Bankruptcy was likely before June 2017, then he was living in cloud cuckoo land. A Stat Demand makes it abundantly clear what will happen. And setting 1 aside, without liquid cash to give to the Petitioner is, shall we say, problematic.
Out of interest , because i'm dumb with these sort of things , so now he's been sent down do all persons/banks whatever get nowt and once time served he starts from scratch with obvious restrictions ?
No. Prison is actually irrelevant to all of this-that only works in the game of Monopoly
If you are honest with the Official Receiver, you are normally discharged from Bankruptcy after 1 year, and only have to make payments from income/give up certain assets for 3 years, and tell any future creditors for 10 years. Then the slate is wiped clean.
But-if you are dishonest, then the time periods go up sharply. He is going to be paying money into the 2030s...
As an aside, there haven't been "debtor's prisons" since the 1870s. The last big one was demolished, and the Old Bailey built in its place. One of the big Debtor's Prisons was "The Clink", hence the name...
I expect it was as simple as the massive slump in the price of Property in Spain and Majorca, which has been ongoing since at least 2008. Prices may well be 30% lower than in 2008, and due to the massive economic downturn there, precious few buyers. "Proper Market Value"-nonsense. It is worth what someone is willing and able to pay for it. The "small fraction" relates to a different world.
If it really was as simple as his Counsel claimed, the Creditors would have just forced the Sale of the Property. It was not that simple-hence the Stat Demand.
And if Mr Becker genuinely did not believe that Bankruptcy was likely before June 2017, then he was living in cloud cuckoo land. A Stat Demand makes it abundantly clear what will happen. And setting 1 aside, without liquid cash to give to the Petitioner is, shall we say, problematic.
I was just thinking that there surely comes a point where you can sell anything. He borrowed less than £4million against it. Maybe the highest ever valuation was £42 million. Surely there was a price somewhere between what he owed, and what it was worth, where it could have been sold, allowing him to settle the loan, and hang on to at least a couple of million quid.
I expect it was as simple as the massive slump in the price of Property in Spain and Majorca, which has been ongoing since at least 2008. Prices may well be 30% lower than in 2008, and due to the massive economic downturn there, precious few buyers. "Proper Market Value"-nonsense. It is worth what someone is willing and able to pay for it. The "small fraction" relates to a different world.
If it really was as simple as his Counsel claimed, the Creditors would have just forced the Sale of the Property. It was not that simple-hence the Stat Demand.
And if Mr Becker genuinely did not believe that Bankruptcy was likely before June 2017, then he was living in cloud cuckoo land. A Stat Demand makes it abundantly clear what will happen. And setting 1 aside, without liquid cash to give to the Petitioner is, shall we say, problematic.
I was just thinking that there surely comes a point where you can sell anything. He borrowed less than £4million against it. Maybe the highest ever valuation was £42 million. Surely there was a price somewhere between what he owed, and what it was worth, where it could have been sold, allowing him to settle the loan, and hang on to at least a couple of million quid.
A lot of people think that way. I think that way.
But the super-rich and famous do not. Which is why all through this he was paying £250,000 p.a in rent for a house in Wimbledon, shopping in Harrods, etc.
I remember 20 years ago advising a lady whose husband had suddenly died. She had never worked. The only asset of value was a £7.5 million house in an exclusive part of the country, west of London. She had no debts, and substantial outgoings. I advised her to sell the house, buy 1 for about £2 million, and live off the proceeds. I still remember her shocked response:-
"You can't get anything round here for £2 million..."
I expect it was as simple as the massive slump in the price of Property in Spain and Majorca, which has been ongoing since at least 2008. Prices may well be 30% lower than in 2008, and due to the massive economic downturn there, precious few buyers. "Proper Market Value"-nonsense. It is worth what someone is willing and able to pay for it. The "small fraction" relates to a different world.
If it really was as simple as his Counsel claimed, the Creditors would have just forced the Sale of the Property. It was not that simple-hence the Stat Demand.
And if Mr Becker genuinely did not believe that Bankruptcy was likely before June 2017, then he was living in cloud cuckoo land. A Stat Demand makes it abundantly clear what will happen. And setting 1 aside, without liquid cash to give to the Petitioner is, shall we say, problematic.
I was just thinking that there surely comes a point where you can sell anything. He borrowed less than £4million against it. Maybe the highest ever valuation was £42 million. Surely there was a price somewhere between what he owed, and what it was worth, where it could have been sold, allowing him to settle the loan, and hang on to at least a couple of million quid.
A lot of people think that way. I think that way.
But the super-rich and famous do not. Which is why all through this he was paying £250,000 p.a in rent for a house in Wimbledon, shopping in Harrods, etc.
I remember 20 years ago advising a lady whose husband had suddenly died. She had never worked. The only asset of value was a £7.5 million house in an exclusive part of the country, west of London. She had no debts, and substantial outgoings. I advised her to sell the house, buy 1 for about £2 million, and live off the proceeds. I still remember her shocked response:-
"You can't get anything round here for £2 million..."
Would you have advised him to allow the bank repossess this property then?
I expect it was as simple as the massive slump in the price of Property in Spain and Majorca, which has been ongoing since at least 2008. Prices may well be 30% lower than in 2008, and due to the massive economic downturn there, precious few buyers. "Proper Market Value"-nonsense. It is worth what someone is willing and able to pay for it. The "small fraction" relates to a different world.
If it really was as simple as his Counsel claimed, the Creditors would have just forced the Sale of the Property. It was not that simple-hence the Stat Demand.
And if Mr Becker genuinely did not believe that Bankruptcy was likely before June 2017, then he was living in cloud cuckoo land. A Stat Demand makes it abundantly clear what will happen. And setting 1 aside, without liquid cash to give to the Petitioner is, shall we say, problematic.
I was just thinking that there surely comes a point where you can sell anything. He borrowed less than £4million against it. Maybe the highest ever valuation was £42 million. Surely there was a price somewhere between what he owed, and what it was worth, where it could have been sold, allowing him to settle the loan, and hang on to at least a couple of million quid.
A lot of people think that way. I think that way.
But the super-rich and famous do not. Which is why all through this he was paying £250,000 p.a in rent for a house in Wimbledon, shopping in Harrods, etc.
I remember 20 years ago advising a lady whose husband had suddenly died. She had never worked. The only asset of value was a £7.5 million house in an exclusive part of the country, west of London. She had no debts, and substantial outgoings. I advised her to sell the house, buy 1 for about £2 million, and live off the proceeds. I still remember her shocked response:-
"You can't get anything round here for £2 million..."
Would you have advised him to allow the bank repossess this property then?
Of course not.
You want, wherever possible, client to retain control. Both to ensure get best price, and to avoid the humungous fees involved in a repo.
The point is, it is not always easy to make clients see what may be best for them.
In its way, it is exactly the same as me trying to justify why I spend more on my Broadband than the per capita GNI of at least 7 countries. In their eyes, I am wasting money on an (equally) unimaginable scale.
Wealth, and spending habits, are viewed very differently by different people. It is very easy to impose our standards on people who live in a totally different way. But it is not necessarily right.
I expect it was as simple as the massive slump in the price of Property in Spain and Majorca, which has been ongoing since at least 2008. Prices may well be 30% lower than in 2008, and due to the massive economic downturn there, precious few buyers. "Proper Market Value"-nonsense. It is worth what someone is willing and able to pay for it. The "small fraction" relates to a different world.
If it really was as simple as his Counsel claimed, the Creditors would have just forced the Sale of the Property. It was not that simple-hence the Stat Demand.
And if Mr Becker genuinely did not believe that Bankruptcy was likely before June 2017, then he was living in cloud cuckoo land. A Stat Demand makes it abundantly clear what will happen. And setting 1 aside, without liquid cash to give to the Petitioner is, shall we say, problematic.
I was just thinking that there surely comes a point where you can sell anything. He borrowed less than £4million against it. Maybe the highest ever valuation was £42 million. Surely there was a price somewhere between what he owed, and what it was worth, where it could have been sold, allowing him to settle the loan, and hang on to at least a couple of million quid.
A lot of people think that way. I think that way.
But the super-rich and famous do not. Which is why all through this he was paying £250,000 p.a in rent for a house in Wimbledon, shopping in Harrods, etc.
I remember 20 years ago advising a lady whose husband had suddenly died. She had never worked. The only asset of value was a £7.5 million house in an exclusive part of the country, west of London. She had no debts, and substantial outgoings. I advised her to sell the house, buy 1 for about £2 million, and live off the proceeds. I still remember her shocked response:-
"You can't get anything round here for £2 million..."
Would you have advised him to allow the bank repossess this property then?
Of course not.
You want, wherever possible, client to retain control. Both to ensure get best price, and to avoid the humungous fees involved in a repo.
The point is, it is not always easy to make clients see what may be best for them.
In its way, it is exactly the same as me trying to justify why I spend more on my Broadband than the per capita GNI of at least 7 countries. In their eyes, I am wasting money on an (equally) unimaginable scale.
Wealth, and spending habits, are viewed very differently by different people. It is very easy to impose our standards on people who live in a totally different way. But it is not necessarily right.
So what would have happened? Did the bank repossess the property, and keep the full proceeds of any sale? Or did they have to sell it, and give any balance to the Official Receiver, after the loan amount, interest, and costs were covered?
I expect it was as simple as the massive slump in the price of Property in Spain and Majorca, which has been ongoing since at least 2008. Prices may well be 30% lower than in 2008, and due to the massive economic downturn there, precious few buyers. "Proper Market Value"-nonsense. It is worth what someone is willing and able to pay for it. The "small fraction" relates to a different world.
If it really was as simple as his Counsel claimed, the Creditors would have just forced the Sale of the Property. It was not that simple-hence the Stat Demand.
And if Mr Becker genuinely did not believe that Bankruptcy was likely before June 2017, then he was living in cloud cuckoo land. A Stat Demand makes it abundantly clear what will happen. And setting 1 aside, without liquid cash to give to the Petitioner is, shall we say, problematic.
I was just thinking that there surely comes a point where you can sell anything. He borrowed less than £4million against it. Maybe the highest ever valuation was £42 million. Surely there was a price somewhere between what he owed, and what it was worth, where it could have been sold, allowing him to settle the loan, and hang on to at least a couple of million quid.
A lot of people think that way. I think that way.
But the super-rich and famous do not. Which is why all through this he was paying £250,000 p.a in rent for a house in Wimbledon, shopping in Harrods, etc.
I remember 20 years ago advising a lady whose husband had suddenly died. She had never worked. The only asset of value was a £7.5 million house in an exclusive part of the country, west of London. She had no debts, and substantial outgoings. I advised her to sell the house, buy 1 for about £2 million, and live off the proceeds. I still remember her shocked response:-
"You can't get anything round here for £2 million..."
Would you have advised him to allow the bank repossess this property then?
Of course not.
You want, wherever possible, client to retain control. Both to ensure get best price, and to avoid the humungous fees involved in a repo.
The point is, it is not always easy to make clients see what may be best for them.
In its way, it is exactly the same as me trying to justify why I spend more on my Broadband than the per capita GNI of at least 7 countries. In their eyes, I am wasting money on an (equally) unimaginable scale.
Wealth, and spending habits, are viewed very differently by different people. It is very easy to impose our standards on people who live in a totally different way. But it is not necessarily right.
So what would have happened? Did the bank repossess the property, and keep the full proceeds of any sale? Or did they have to sell it, and give any balance to the Official Receiver, after the loan amount, interest, and costs were covered?
In my example? No idea. She never came back. Which happens quite a lot. Until people are able to grasp their new reality.
That was the best time to give advice, from the Client's point of view. There was no mortgage on the property. No debts. But only enough liquid cash for about 6 months' living expenses. The problem would have been future creditors.
Banks do not keep the full proceeds-just what they are owed, plus expenses. The expenses can be massive-the average Insolvency Practitioner Fees (the person usually appointed post-bankruptcy) are about £500 per hour. While he is dealing with Solicitors/Estate Agents/Accountants etc-which, again, have fees chargeable to the Bankrupt's assets. Far more when case is complex, and/or large sums of money, and/or certain City Firms (like in the Becker case).
It is quite often the case that the Insolvency Practitioner gets more money than the Creditors.
If there is any balance left after all that, then the Debtor is not insolvent, and is discharged from Bankruptcy.
It is all a lot easier, and cheaper, for matters to be resolved without Bankruptcy, where possible.
Comments
How does a £3m loan result in owing £50m ?
I was wondering exactly that.
Terms & Conditions of Loan. gambling of the worst kind.
1. It becomes known that X has defaulted on £3million loan;
2. Every single Debtor of X refuses to pay a single penny they owe X
3. Every single Creditor demands payment immediately
4. Every single person who used to give X work stops doing so
5. The Company that X owns becomes worthless overnight
6. There is a fire sale of X's Assets at way less than they were worth last week
7. The liquidators/trustees in bankruptcy charge an absolute fortune in fees, dwarfing the Solicitors/Estate Agents/Forensic Accountants/Creditors solicitors etc
8. And hey presto-the £3million debt causes a £50 million debt
He said he was involved in an 'expensive divorce' with ex-wife Barbara in 2001, involving high maintenance payments to their two sons, and had to support his daughter Anna and her mother, in a deal which included the Chelsea flat.
Becker, who was resident in Monte Carlo and Switzerland before moving to the UK, said he had 'expensive lifestyle commitments,' including his £22,000-a-month rented house in Wimbledon, south-west London.
He also owed the Swiss authorities five million francs (about £4 million) and separately just under one million euros (more than £800,000) in liabilities over a conviction for tax evasion and attempted tax evasion in Germany in 2002.
Sorry it's late and I'm bored.
The money he borrowed against it appears to be a small fraction of the value.
Humiliated' Boris Becker has 'nothing' to show for 'glittering' career
Tennis legend Boris Becker has been left with nothing to show for his 'glittering' sporting career and will have to rely on charity to survive, his lawyer has said.
The three-time Wimbledon Champion, 54, was declared bankrupt in 2017 over a loan from private bank Arbuthnot Latham against his estate in Mallorca.
His barrister Jonathan Laidlaw QC said the bank now has the property, which Becker said was worth about 50 million euros (£42 million) at the height of the property market.
The court heard Becker's bankruptcy resulted from a £3.85 million loan from private bank Arbuthnot Latham in 2013,
Background
2. Arbuthnot Latham lent you money in connection with development of The Finca, a Spanish property that you owned in Mallorca. On 27 July 2016, after protracted attempts by you and various sets of advisers to negotiate a settlement or to raise money elsewhere to pay the debt, a Statutory Demand was issued by the bank for the outstanding sum. You contested those proceedings. On 30th August 2016, you submitted a statement in opposition to the Statutory Demand. On 12th April 2017 your application to set aside the Statutory Demand was dismissed, and leave was granted for Arbuthnot Latham to present a petition . On 28th April 2017 the Bankruptcy Petition was presented to the High Court for £3,348,582.57. Your application of 16 June 2017 resisting the order was dismissed and on 21 June 2017 the petition was heard at the High Court and the Bankruptcy Order was made.
Relevant evidence
3. On your own evidence at trial you had not at any stage before 21 June 2017 expected that the Bankruptcy order would be made. That was your position in the defence of the bankruptcy proceedings. Despite the failure of the attempts to contest the proceedings, your evidence was that you thought more time would be given for a “White Knight” to assist you, or for you to raise money which would enable The Finca to be sold at a proper market value such as would enable your debts to be paid off.
I expect it was as simple as the massive slump in the price of Property in Spain and Majorca, which has been ongoing since at least 2008. Prices may well be 30% lower than in 2008, and due to the massive economic downturn there, precious few buyers. "Proper Market Value"-nonsense. It is worth what someone is willing and able to pay for it. The "small fraction" relates to a different world.
If it really was as simple as his Counsel claimed, the Creditors would have just forced the Sale of the Property. It was not that simple-hence the Stat Demand.
And if Mr Becker genuinely did not believe that Bankruptcy was likely before June 2017, then he was living in cloud cuckoo land. A Stat Demand makes it abundantly clear what will happen. And setting 1 aside, without liquid cash to give to the Petitioner is, shall we say, problematic.
If you are honest with the Official Receiver, you are normally discharged from Bankruptcy after 1 year, and only have to make payments from income/give up certain assets for 3 years, and tell any future creditors for 10 years. Then the slate is wiped clean.
But-if you are dishonest, then the time periods go up sharply. He is going to be paying money into the 2030s...
As an aside, there haven't been "debtor's prisons" since the 1870s. The last big one was demolished, and the Old Bailey built in its place. One of the big Debtor's Prisons was "The Clink", hence the name...
He borrowed less than £4million against it.
Maybe the highest ever valuation was £42 million.
Surely there was a price somewhere between what he owed, and what it was worth, where it could have been sold, allowing him to settle the loan, and hang on to at least a couple of million quid.
But the super-rich and famous do not. Which is why all through this he was paying £250,000 p.a in rent for a house in Wimbledon, shopping in Harrods, etc.
I remember 20 years ago advising a lady whose husband had suddenly died. She had never worked. The only asset of value was a £7.5 million house in an exclusive part of the country, west of London. She had no debts, and substantial outgoings. I advised her to sell the house, buy 1 for about £2 million, and live off the proceeds. I still remember her shocked response:-
"You can't get anything round here for £2 million..."
You want, wherever possible, client to retain control. Both to ensure get best price, and to avoid the humungous fees involved in a repo.
The point is, it is not always easy to make clients see what may be best for them.
In its way, it is exactly the same as me trying to justify why I spend more on my Broadband than the per capita GNI of at least 7 countries. In their eyes, I am wasting money on an (equally) unimaginable scale.
Wealth, and spending habits, are viewed very differently by different people. It is very easy to impose our standards on people who live in a totally different way. But it is not necessarily right.
Did the bank repossess the property, and keep the full proceeds of any sale?
Or did they have to sell it, and give any balance to the Official Receiver, after the loan amount, interest, and costs were covered?
That was the best time to give advice, from the Client's point of view. There was no mortgage on the property. No debts. But only enough liquid cash for about 6 months' living expenses. The problem would have been future creditors.
Banks do not keep the full proceeds-just what they are owed, plus expenses. The expenses can be massive-the average Insolvency Practitioner Fees (the person usually appointed post-bankruptcy) are about £500 per hour. While he is dealing with Solicitors/Estate Agents/Accountants etc-which, again, have fees chargeable to the Bankrupt's assets. Far more when case is complex, and/or large sums of money, and/or certain City Firms (like in the Becker case).
It is quite often the case that the Insolvency Practitioner gets more money than the Creditors.
If there is any balance left after all that, then the Debtor is not insolvent, and is discharged from Bankruptcy.
It is all a lot easier, and cheaper, for matters to be resolved without Bankruptcy, where possible.