On 29 April, six-time Gland Slam tennis champion Boris Becker was sentenced to a term of two years and six months in prison following his conviction for offences under the Insolvency Act 1986.
At his trial at Southwark Crown Court Mr Becker faced 24 charges in relation to allegations that he hid assets from the trustees in bankruptcy. In finding him guilty of four of the 24 charges the jury found that Mr Becker had concealed millions of pounds worth of assets including €426,930 that he had transferred to a number of recipients including his two ex-wives. Mr Becker was also found to have concealed a property in his hometown of Leimen in Germany, shares that he owned in a data company and a €825,000 loan that he owed to a bank.
In sentencing Mr Becker to an immediate term of imprisonment, the Judge remarked that he had shown "no humility" or "remorse or acceptance of his guilt".
Mr Becker was declared bankrupt in June 2017 following his failure to pay a debt to the private bank Arbuthnot Latham. In 2018, Mr Becker attempted to claim diplomatic immunity from bankruptcy proceedings as a result of his role as an attaché for the Central African Republic. His decision to drop the claim allowed him to be pursued for further assets.
Bankruptcy restrictions are typically lifted a year after bankruptcy has been declared but in Mr Becker's case the Official Receiver for the Insolvency Service secured a 12-year extension to bankruptcy proceedings following its investigation into undisclosed transactions involving Mr Becker.
As part of the bankruptcy proceedings, Mr Becker had a duty to be transparent and to fully disclose his assets to the trustees. The jury found that Mr Becker had acted dishonestly by transferring and failing to disclose assets to the trustees.
Mr Becker's conviction is a cautionary tale for those who face bankruptcy proceedings and highlights the need to be transparent and honest when dealing with the trustees in bankruptcy. Mr Becker's finances were described as being a "mess and chaotic". Mr Becker had also argued during his trial that he had limited involvement with his finances, relied on the judgement of his advisers and agents and stated that he was not told that the restrictions imposed on him barred him from moving his assets. These arguments did not prove successful in Mr Becker's defence as the jury were unpersuaded and convicted him.
The insolvency regime is in place to protect creditors (such as the bank that petitioned for Mr Becker's bankruptcy). The function of a trustee in bankruptcy is to collect in and realise the bankrupt's assets, and then distribute the proceeds among the bankrupt's creditors. If a bankrupt conceals assets, it is the creditors who suffer. Trustees in bankruptcy act on behalf of creditors. As can be seen from Mr Becker's case, trustees are empowered to bring proceedings to recover assets, which ought to be available for distribution to creditors, and to precipitate criminal proceedings in cases of criminal wrongdoing. Mr Becker's case has shown how severe the repercussions can be.
Due to the fact that insolvency processes can have such serious implications, and give rise to such far-reaching powers:
- Those who face financial difficulties should take legal advice on the appropriate steps to take, especially if they have entered into any significant transactions or made significant financial decisions, or plan to do so.
- Whenever considering enforcement action, a creditor should consider pursuing recourse against the debtor via an insolvency process, especially where wrongdoing or fraud is suspected.