Richard Michael Phillips, unemployed and a former night club owner, has been handed a 12-year bankruptcy restriction by the High Court for dishonestly assisting another in a breach of trust by receiving and distributing 565,000, the proceeds from the fraudulent sale of a property
In subsequent proceedings brought by the defrauded buyers, Mr Phillips agreed to pay them 75,000. This sum was not paid and thus the debt has materially contributed to his bankruptcy. Mr Phillips restriction follows an investigation by the Insolvency Service.
The bankruptcy restrictions order made in the High Court on 12 June against Mr Phillips (64) means that he will be bound by the restrictions set out in Insolvency law that a bankrupt is subject to until they are discharged from bankruptcy normally 12 months until 2027. In addition, he cannot manage or control a company during this period without leave of the court.
A bankruptcy order was made against Mr Phillips on 18 February 2013, following the presentation of a petition made by the liquidator of Mr Phillips former limited company as a result of the liquidators investigation into the companys affairs, and his total deficiency was 1.8m of which 1.69m was owed to the liquidator.
The court heard that on 9 June 2011 Mr Phillips received the proceeds from a fraudulent sale of a property of 565,000, and in just over a week had distributed them to various parties and made large withdrawals of cash. He also paid 98,000 to a family member the day after receipt. A further 200,000 was paid to a third party company and then withdrawn in cash by Mr Phillips and others on 14 June 2011.
The fraud was discovered by the defrauded buyers of the property and on 16 June 2011, the solicitors for the buyers asked Mr Phillips for the return of the money, which he failed to do. He was made party to Court proceedings by the defrauded parties and these were stayed against him pursuant to a Tomlin order (that is the parties agreed to the order being made) for the payment of 75,000. The money was never paid and is included in the bankruptcy proceedings.