Bankrupt’s obligation to disclose financial information—Hicken v Ellison

Bankrupt’s obligation to disclose financial information—Hicken v Ellison

Derek Cockle, solicitor at Osmond & Osmond, assesses the practical implications of the judgment in Hicken v Ellison concerning the Chancery Division’s decision to allow a hearing to take place in in the respondent’s absence in relation to the trustee in bankruptcy’s (trustee) application for the committal of the respondent bankrupt for breach of financial disclosure orders.

Original news

Re Ellison (A Bankrupt); Hicken (as Trustee in Bankruptcy of Ellison) v Ellison [2016] EWHC 2791 (Ch), [2016] All ER (D) 76 (Nov)

The Chancery Division granted the trustee’s application for the committal of the respondent bankrupt for breach of financial disclosure orders. The court held that, on the facts, it could take the exceptional course of hearing the application in the respondent’s absence, and thatthe allegations of contempt had been established to the extent indicated. The application in respect of sentence was adjourned.

How did the issues arise?

The trustee applied for the committal of Dr Ellison, the bankrupt, for breach of a number of orders of the court requiring disclosure of financial information. The issues arose after the trustee continued with the official receiver’s application for an income payments order (IPO) following Dr Ellison’s second bankruptcy. Dr Ellison was suspended from his automatic discharge after his first bankruptcy for non-co-operation; a stubbornness thatcontinued after his second bankruptcy.

Dr Ellison breached various disclosure orders intended initially to assist the trustee to establish income and expenditure for an IPO. That later became the catalyst for the making of a freezing order and further financial disclosure.

Dr Ellison was stated to have always placed his assets into tax-efficient protective structures so his financial position was unorthodox and challenging.

What were the main legal arguments?

In keeping with his lack of engagement with his obligation to cooperate, Dr Ellison did not attend the hearing, citing an illness as preventing him. It was evident he was fully informed of the progress of the application and was well aware of it.

It was clear

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.