Richard Balfour-Lynn, a prominent figure in the property and wine industries, has been declared bankrupt after failing to meet a multi-million pound compensation obligation linked to a stock market scandal involving the previous owner of luxury retailer Liberty.

The 71-year-old Balfour-Lynn stated he lacked the resources to fulfill the substantial compensation mandated by the Takeover Panel last year, which highlighted significant “deceit and wrongdoing” at MWB Group, the publicly traded company he led that collapsed in 2012.

A total of ten men, Balfour-Lynn included, were implicated in a complex network of fraudulent transactions and misleading activities across various jurisdictions. The objective was to hide the fact that three MWB managers and external investors manipulated their share holdings to exceed 29.9%, which typically triggers a requirement for a comprehensive offer. This arrangement was kept under wraps, and no such offer was ever made.

The Takeover Panel noted that it had been “systematically misled” during its investigation, leading to the decision to impose a “cold-shouldered” requirement, which prevents any regulated UK firm from representing these individuals in future takeover endeavors.

These infractions occurred in 2009 when MWB owned Liberty along with the Hotel du Vin and Malmaison hotel chains. The misconduct was not brought to light until July of the previous year.

In a November ruling by the High Court, Balfour-Lynn, along with Jagtar Singh, a finance director at MWB, and Guy Aspland-Robinson, another executive, were found liable to pay a total of £44.9 million to shareholders as per the panel’s findings.

Balfour-Lynn, who co-founded the Balfour Winery, a leading English wine producer based in Kent, expressed that filing for bankruptcy would tarnish his business reputation and noted the blow to his ego, according to comments made by Chief Insolvency Judge Briggs.

However, Judge Briggs explained that an alleged inability to pay the required compensation was not sufficient to prevent enforcement of the order. It was further stated that Balfour-Lynn failed to provide a complete and transparent accounting of his assets and liabilities. His bankruptcy was confirmed last week. In a statement, he commented, “I have, regrettably, been forced to file for bankruptcy. I am semi-retired, and my wealth was tied up in MWB shares, which I never sold.”

Balfour-Lynn also communicated that a £2 million compensation proposal intended for qualified former shareholders, funded by his wife Leslie, had been rejected by the panel, leading him to worry that those eligible shareholders may end up with nothing.

He remarked, “I never envisioned finding myself in this situation and have consistently met my debts throughout my life.” While he maintains he did not act dishonestly, he admitted to making mistakes during the court proceedings.

He believed his £2 million offer could have provided much-needed support for those affected by decisions made during the 2008 financial crisis when his company faced imminent collapse.

The Takeover Panel dismissed the £2 million offer, asserting that they were not a creditor in the matter and therefore could not accept the proposal because the compensation was due to MWB shareholders.

Leslie Balfour-Lynn, also 71, who is connected to the Sega computer games lineage, oversees Balfour Hospitality, which encompasses Balfour Winery and other ventures. Richard Balfour-Lynn is neither a director nor a shareholder of the company.

Guy Aspland-Robinson and Jagtar Singh were previously declared bankrupt in 2022.