A recent celebrity case to hit the headlines is a reminder to all those involved in bankruptcy proceedings – to comply with your duties and work with your trustees in bankruptcy.
Six-time Grand Slam Tennis Champion Boris Becker was found guilty on 8 April 2022 of four charges under the Insolvency Act 1986 following his trial at Southwark Crown Court. He was sentenced to two and a half years in prison on 29 April 2022.
Becker was legally bound to provide full disclosure of his assets following being made bankrupt on 21 June 2017. A bankruptcy order causes the bankrupt’s assets to become a part of the bankruptcy estate.
The Legal Position
The Insolvency Act 1986 (the “Act”) places duties and obligations on the bankrupt to provide information on all their affairs to their trustees in bankruptcy. This allows the trustees to carry out their statutory duties to realise assets and distribute available funds to creditors. It’s a duty imposed on any bankrupt regardless of their celebrity status.
Boris Becker failed to comply with these duties and continued to fund his affluent lifestyle.
Becker was charged with 24 counts under the Act relating to a period between May and October 2017. These included the removal of property, seven counts of concealing property and nine counts of failing to hand over medals and trophies from his successful tennis career.
The Court heard how Becker had removed property from his bankruptcy estate and transferred approximately £350,000 to several third parties, including his ex-wives. He also failed to disclose ownership of his property in Leiman, Germany.
The former tennis champion concealed a loan worth £620,000 from the Bank of Alpinum of Lichtenstein and failed to declare ownership of 75,000 shares in Breaking Data Corp.
Despite his bankruptcy, he was accused of concealing £950,000 from the sale of a German Mercedes car dealership. The funds were paid into a business account used as his “piggy bank”. This continued to pay for his opulent personal expenses including payments to Harrods, Porsche, Ralph Lauren and spending £7,600 on his children’s school fees. Becker also spent £40,000 on an ankle operation at a private clinic, paid £10,000 to a private jet company and spent over £5,000 at a luxury golf resort in China.
Throughout his career, Boris Becker won 49 singles titles in 77 finals. He was accused of failing to hand over trophies and medals won during his tennis career. The prizes included Wimbledon trophies, Australian Open trophies, the President Cup, the Davis Cup trophy, a Davis Cup gold coin and an Olympic gold medal. His defence – he did not know where the memorabilia was.
Boris Becker told the jury that despite making a large amount throughout his professional tennis career, his earnings dramatically reduced following his retirement in 1999. He said that he spent the £38 million career earnings on his divorce from his first wife Barbara Becker, paying for child support and lifestyle commitments.
Becker declared he was “shocked” and “embarrassed” when he had to declare bankruptcy. Bad press had damaged his brand which made it difficult for him to make enough money to pay off his debts.
Chief Executive of the Insolvency Service, Dean Beale, said:
“Today’s verdict confirms that Boris Becker failed to comply with his legal obligation to declare significant assets in his bankruptcy. This conviction serves as a clear warning to those who think they can hide their assets and get away with it. You will be found out and prosecuted.”
Despite being charged with 24 counts, Becker was acquitted on twenty charges and was only found guilty of four charges, including removal of property, two counts of failing to disclose and concealing debt.
On 29 April 2022, Boris Becker was sentenced to two and a half years in prison.
Judge Deborah Taylor commented that despite his previous conviction of tax evasion in Germany in 2002, Boris Becker showed no remorse or humility and “did not heed the warning you were given and the chance you were given by the suspended sentence”.
In addition to his prison sentencing, he is subject to a 12-year Bankruptcy Restriction Undertaking which will take effect as of 17 October 2019 until 16 October 2031. Becker’s discharge from bankruptcy has also been suspended indefinitely meaning the Official Receiver decides when Becker will be released from his bankruptcy.
The charges against Becker and his subsequent sentencing serves as a clear warning that the Court will take action against any bankrupt who has been found contravening the Act and attempting to conceal information from the trustees in bankruptcy.
As Chief Executive of the Insolvency Service, Dean Beale, summarised:
“Boris Becker’s sentence clearly demonstrates that concealing assets in bankruptcy is a serious offence for which we will prosecute and bring offenders to justice.”
Posted on May 13, 2022