Suky Mann, our resident director disqualification expert, successfully defended her client from allegations that she had caused her company to obtain a Bounce Back Loan (“BBL”) of £50,000 to which it was not entitled, and that she failed to use the loan for the economic benefit of the company.
The client was facing a significant period of disqualification and a compensation order requiring her to repay the BBL in full.
Background
Whilst the investigation was very much in its infancy, the client contacted Suky immediately upon receipt of the Insolvency Service’s (IS) first letter, which asked her to complete a questionnaire. Our client understood the seriousness of the investigation and wanted to ensure that she was properly equipped to deal with the extensive enquiries.
The challenge
The company accounts appear to have been the starting point in the Insolvency Service’s investigation, seemingly pinning its entire case on the last set of accounts filed before the BBL application was made, which showed that the company was dormant.
However, the Insolvency Service had incorrectly assumed that the dormant accounts to December 2019 meant that the company was not trading as at 1 March 2020 (a prerequisite of the eligibility rules), and therefore, it was not entitled to a BBL.
We were able to demonstrate that the company had, in fact, commenced trading in January 2020, and reliance on the information on Companies House in isolation was wholly inappropriate and misleading.
The second limb of the investigation was the estimated turnover figure quoted in the application, which resulted in the company receiving a BBL of £50,000. Again, with reference to communications with the bank, industry trends and pipeline contracts, we were able to demonstrate that the estimated turnover relied on was legitimate and responsible.
Having overcome the first two hurdles, we had to subsequently demonstrate that the BBL had been used for the company's economic benefit. Although on first blush it appeared that our client had transferred the BBL to her personal account in its entirety, we were able to demonstrate that the funds had been applied directly to legitimate business expenditure.
On receipt Suky’s detailed letter of representations, the Insolvency Service’s solicitors confirmed that no further action was being taken against our client.
Our client was overwhelmed with emotion when Suky notified her that the investigation had been abandoned. The prospect of disqualification and a £50,000 compensation order was weighing heavily on our client. The relief she felt was equally matched by her gratitude to Suky.
I highly recommend Higgs, and particularly Suky Mann. Suky was incredibly professional, knowledgeable, and supportive throughout my case. She explained everything clearly, kept me informed at every step, and provided invaluable guidance. Suky’s dedication and attention to detail made a difficult process much easier, and I felt completely supported the entire time. Thank you so much!”
A satisfied client
