12-year Bankruptcy Restriction Order for dishonest bankrupt

The official receiver applied for a Bankruptcy Restriction Order (BRO) against a bankrupt who had persuaded four investors to loan him funds for an apparent property investment.

He did not invest any of the investors’ money, instead using it for his companies, personal expenses and to fund his own lifestyle. He transferred over £1million to associated companies and parties, including his wife.

When the investors had paid him, the bankrupt had known that he was facing bankruptcy and a county court judgment. He had dishonestly misled the investors to loan him the money. He gave false information, and there was no realistic basis for him to believe that he could repay.

The bankrupt’s conduct meant that the case fell within the Insolvency Act 1986 sch.4A para.2(2). A BRO had to reflect the gravity of the conduct and its purpose was to protect the public. Considering his disregard of the bankruptcy petition, the huge sums borrowed, spending the money on his extravagant lifestyle, his unrealistic belief about repayment, and his lack of contrition, his conduct placed him in the top bracket. The court made a BRO for 12 years.

In regards to Official Receiver v Armstrong [2024] EWHC 736 (Ch).

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