The pounds 406.5m bankruptcy order made by Mr Registrar Scott at the end of a private hearing at the High Court in London far exceeds the previous highest, the pounds 118m order against William Stern, the property developer, in 1974.
Mr Maxwell said outside the court that he stood there with 'a degree of humility'. He added: 'Bankruptcy is a very public humbling.'
The bankruptcy order was sought by Robson Rhodes, the accountancy firm that is liquidator of Bishopsgate Investment Management, the Maxwell company that managed hundreds of millions of pounds of missing pension fund money. As Mr Maxwell left court an unidentified man - possibly a Maxwell pensioner - waved a pounds 5 note under his nose and asked 'Are we going to get any money?'
In the coming weeks and months, Mr Maxwell will find many things he has taken for granted barred to him. He will be unable to obtain more than pounds 250 of credit without disclosing his bankruptcy to the person giving credit. Nor may he be a company director or be involved in the setting up or running of a company without the court's permission. He may not carry on business in any name other than the name under which he has been made bankrupt without telling the people he is dealing with.
He must tell the trustee in bankruptcy about any property, such as a bequest, obtained after the order and may even be ordered to pay a percentage of his earnings to the trustee.
A further consequence of personal bankruptcy is that the person concerned may have to vacate his home.
The granting of the petition was sought by Stephenson Harwood, the City firm of solicitors acting for Robson Rhodes. Peter DuBuisson and Phillip Sykes, insolvency partners at BDO Binder Hamlyn, another accountancy firm, are expected to be appointed today as Mr Maxwell's trustees in bankruptcy. They are experienced insolvency practitioners who were previously administrators of Sock Shop, which collapsed in February 1990. They will investigate, collect assets and distribute them to Mr Maxwell's creditors, of which Bishopsgate is the biggest.
Mr DuBuisson said last night it was too soon to say how the bankruptcy would work; he would be having early discussions with Mr Maxwell about his finances. Soon after his father's death last November, Mr Maxwell put his personal assets at pounds 1.6m and his debts at pounds 1.75m.
Among the issues would be whether the court should pay Mr Maxwell a living allowance. When his assets were frozen last December, he was awarded pounds 1,500 a week. That was stopped after a summary judgment in July ordered him to pay pounds 406.5m in damages for the benefit of the Maxwell pensioners. The judgment for his alleged breach of duty as a director of Bishopsgate was not opposed by Mr Maxwell.
All Mr Maxwell's assets will be vulnerable to the trustees, including his home and car. It emerged earlier this week that he had sold his neo-Georgian house in Chelsea - once valued at pounds 1.7m - for an unknown price. The trustees are also likely to look closely at the assets of Mr Maxwell's wife, Pandora - including a pounds 300,000 converted barn in Oxfordshire to which the family is reported to have moved - to satisfy themselves of the true ownership. In certain circumstances, a bankruptcy trustee can take back anything given away or sold at less than true value within the past five years.
In a straightforward case, a bankrupt could expect to be discharged within about three years. But in a complex situation like the Maxwell affair the inquiries are likely to take much longer.
Mr Maxwell said yesterday the bankruptcy order had been inevitable. 'As I said at the time (July), I did not have the resources to continue to defend their claims against me as I would have wished. Had I had the resources, I would have strenuously denied all the allegations of breach of duty.
'I believe Bishopsgate's pursuit of my bankruptcy has been misconceived,' he said, adding that a voluntary arrangement he had proposed would have been in the best interests of creditors.
Mr Maxwell said that if there was a redeeming feature of the bankruptcy order, it was perhaps that the thousands of people who had suffered loss could see a former director, and a Maxwell, suffer the consequences of their loss personally and in public.
His solicitor, Keith Oliver, said that, in making the bankruptcy order, the registrar had made it clear that he had made no adverse finding against Mr Maxwell in relation to the presentation of an expedited petition by the liquidator. The reasons for making the order will be given later.
The move for expedition was apparently based on fears that assets might be dissipated - an allegation strongly rejected by Mr Maxwell. He had put up a vigorous opposition to the bankruptcy petition and had won two earlier adjournments before yesterday's decision.
Margaret Cole of Stephenson Harwood said Robson Rhodes had pressed for a bankruptcy order because the liquidator had a judgment of more than pounds 400m against Mr Maxwell, who accepted he could not pay the debt and 'he also accepted that he was insolvent. So the clear course was to ask the court to make him bankrupt.'
The liquidator has also made an application for summary judgment in respect of alleged breach of duty against Mr Maxwell's brother, Ian, 36, also a Bishopsgate director. He opposed the move and a ruling in his case is to be given later this month.
Both brothers are on bail after being charged with various counts of conspiracy to defraud.Reuse content