Fraud in obtaining voluntary arrangements
Fraud in obtaining voluntary arrangements

The following Corporate Crime guidance note provides comprehensive and up to date legal information covering:

  • Fraud in obtaining voluntary arrangements
  • False representation or fraud for purposes of obtaining creditors' approval
  • Elements of the offence of false representation or fraud for purposes of obtaining creditors' approval
  • False representation, fraudulent act, or omissions
  • Sentencing for the offence of false representation or fraud for purposes of obtaining creditors' approval

False representation or fraud for purposes of obtaining creditors' approval

The Insolvency Act 1986 (IA 1986) creates a specific offence relating to fraud for the purposes of obtaining approval of the creditors to a proposed voluntary arrangement. An individual debtor commits an offence if, for the purpose of obtaining the approval of the creditors to a proposal for a voluntary arrangement, they either:

  1. (a) make any false representation, or

  2. (b) fraudulently does, or omits to do anything

This wide wording has the intention of catching any fraudulent behaviour engaged in with the aim of securing a voluntary arrangement.

An offence may be committed even if the proposal is not approved.

The offence is an either-way offence.

In proposed voluntary arrangements a similar offence can be committed by any person who is an officer of the company (including director, shadow director, manager or company secretary) under section 6A IA 1986. See Practice Note: False representations to obtain approval for a company voluntary arrangement.

Elements of the offence of false representation or fraud for purposes of obtaining creditors' approval

The offence is committed if:

  1. a