The restrictions, which also disqualify them from being directors, started on 25 July 2013, following an investigation by the Insolvency Service.
Mr Collins and Mr Bone gave the bankruptcy restrictions undertakings to the Secretary of State for Business, Innovations and Skills, following earlier bankruptcy orders made on 9 May 2012 and 31 May 2012 respectively. They each owed over £4.5 million to creditors.
Investigators found that from January 2010 to April 2011, Mr Collins (34) of Covent Garden, London, who danced on the TV show as one half of the act “Faces of Disco” and his cousin, David Bone (31) of Middleton, Greater Manchester, took £874,000 from investors promising returns of between eight and ten percent, but instead used the funds to pay business expenses.
At the time, the two dancers already owed over £3 million to creditors following the failure of a similar property business. Between November 2010 and April 2011, they also took a further £187,500 from the public despite being warned not to do so by the Financial Conduct Authority.
Mr Collins and Mr Bone failed to carry out any of the investment activity that investors would have reasonably expected them to do. When investors sought explanations they were misled and the true state of the partnerships finances were kept from them.
Commenting on the case, Ken Beasley of the Insolvency Service’s Public Interest Unit said:
“At a time when they were already heavily indebted Mr Collins and Mr Bone took substantial sums of money from members of the public with the promise of high returns on property investments with no reasonable expectation that they would ever be able to meet the repayments promised to investors."
"The Insolvency Service investigates the circumstances of all bankruptcies and will use its enforcement powers to tackle serious misconduct of this kind.”
Notes to Editors
1. A bankruptcy order was made against Liam James Collins in the Newcastle County Court on 9 May 2012. The bankruptcy restriction undertaking given by Mr Collins started on 25 July 2012 until 24 July 2027. The Newcastle County Court had previously made an Interim Bankruptcy Restrictions Order at the first hearing of the Official Receiver’s application for a Bankruptcy Restrictions Order on 25 July 2013.
2. A bankruptcy order was made against David Bone in the Wigan County Court on 31 May 2012. The bankruptcy restriction undertaking given by Mr Bone started on 1 August 2013 until 31 July 2027.
3. The role of the Official Receiver: When a court has made an insolvency order (a personal bankruptcy against an individual or a winding-up order against a company) the Official Receiver, a civil servant of the Insolvency Service with wide ranging statutory powers to obtain information, is responsible for collecting and protecting any assets for the benefit of creditors. When the Official Receiver thinks there is cause to do so they can also investigate, in the public interest, the conduct and financial affairs of the bankrupt for the period leading up to the insolvency order being made.
4. Bankruptcy Restrictions: These are restrictions set out in insolvency law that the bankrupt is subject to until they are discharged from bankruptcy – normally 12 months and include that bankrupts:-
- must disclose their status to a credit provider if they wish to get credit of more than £500;
- who carry on business in a different name from the name in which they were made bankrupt, they must disclose to those they wish to do business with the name (or trading style) under which they were made bankrupt;
- may not act as the director of a company nor take part in its promotion, formation or management unless they have a court’s permission to do so;
- may not act as an insolvency practitioner, or as the receiver or manager of the property of a company on behalf of debenture holders;
- may not be a Member of Parliament in England or Wales.
There are many other restrictions, which are not set out in insolvency law. For example, you would not be able to act as a local councillor. We have published a detailed list of restrictions, which is available on our website at: www.bis.gov.uk/insolvency.
5. Bankruptcy Restrictions Orders and Bankruptcy Restrictions Undertakings: If the Official Receiver considers that the conduct of a bankrupt has been dishonest or blameworthy in some other way, he (or she) will report the facts to court and ask for a Bankruptcy Restrictions Order (BRO) to be made. The court will consider this report and any other evidence put before it, and will decide whether it should make a BRO. If it does, the bankrupt will be subject to certain restrictions for the period stated in the order. This can be from 2 to 15 years.
The bankrupt may instead agree to a Bankruptcy Restrictions Undertaking (BRU) which has the same effect as an order, but will mean that the matter does not go to court.
6. The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The agency also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of the Insolvency Service is available from http://www.bis.gov.uk/insolvency
7. Media Enquiries should be directed to Kathryn Montague – Media Relations Manager – 020 7674 6910 or Ade Daramy, Press Officer - 020 76596 6187.
8. You can now subscribe to get e-mail alerts from the Insolvency Service. To subscribe, go to our website www.bis.gov.uk/insolvency and you will see a button to “sign up for email alerts and newsletters”, or click on the following link: https://public.govdelivery.com/accounts/UKBIS/subscriber/new.
The Insolvency Service is now on twitter, you can follow us at @insolvencygovuk.