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Bankrupt hospitality business transfer agent jailed for avoiding creditors

Bankrupt hospitality business transfer agent jailed for avoiding creditors

A bankrupt hospitality business transfer agent has been sentenced to six months in jail for avoiding payments to creditors.

James Ferguson, who bought and sold restaurants, pubs and bars, was initially investigated by the Insolvency Service after he transferred cash to his partner to avoid his creditors. A full criminal investigation and prosecution was subsequently carried out by the Department for Business, Innovation and Skills.

Mike Williams, deputy chief investigation officer, said: "By choosing to remove funds from his estate, Mr Ferguson not only placed his property outside the reach of his creditors and his trustee in bankruptcy, he also sought to undermine the bankruptcy regime by circumventing an order of the court.

"This was a deliberate attempt to defeat the bankruptcy legislation. By imposing this jail term, the Court has sent a message that it treats seriously those who seek to undermine the proper administration of justice."

Investigations found that Ferguson transferred £29,920 to his partner Gillian Calvert to put the money beyond the reach of two of his creditors that were pursuing him for debt.

Then, just 13 days later, he declared himself bankrupt in an attempt to cancel out these creditors' claims against him.

He was convicted of one charge of fraudulently disposing of an asset and ordered to pay £4,500 costs.

Ferguson was already the subject of a bankruptcy restrictions order (BRO) following the initial Insolvency Service investigation. The Service found that in the seven weeks prior to declaring himself bankrupt, and knowing he was insolvent, Ferguson disposed of over £100,000 of assets to the clear detriment of his creditors.

The Service secured a BRO against Ferguson for seven years from 11 August 2011.

Ferguson's business ran into trouble by the start of 2008, when it suffered from falling values in the property market. This meant he was forced to sell properties he had contracted to buy at a loss.

When the developers of some properties he had contracted to buy pursued him for payment under the contract, he claimed he did not have the funds to pay and offered a modest sum for settlement instead.

But the reality was that he had received considerable amounts into his bank account in this period, including £59,508 from the sale of his home in September 2009.

This was enough to pay a sizeable proportion of his creditors but he chose to transfer over half of these funds to his partner instead.

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