Our clients commented: “I’m relieved and grateful to learn that they do not intend to bring Director Disqualification proceedings.”
NDP are well used to Director Disqualification cases involving allegations of misconduct deriving from the Bounce Back Loan Scheme (BBLS). In this case, two of our Director Disqualification specialists, Sukhbir Mall and Tom Clinton provided the expertise and assistance that delivered the result our clients wanted.
The details of this Director Disqualification over Bounce Back Loan misuse case
Recently, two clients of NDP were asked by the Insolvency Service to complete a Director Questionnaire in relation to a company for which one client was a director and the other an employee (assumed to be a director), in which questions were asked of the client focused on two areas of investigation:
- Causing and/or allowing their company to apply for a Bounce Back Loan despite being ineligible; and
- Misusing the funds obtained contrary to BBLS terms and conditions.
The director client relied upon his being a director to earn a living and worked in a sector that provided services beneficial to the wider public. The public interest in seeking to disqualify the director was therefore rightly placed at the forefront of NDP’s response to the Insolvency Service.
A twist in this particular matter was that one of NDP’s clients was not in fact a director at all, despite the Insolvency Service’s assumption she was.
Tailored Legal Strategy and Thorough Response
Upon being instructed, NDP set about finding evidence that corroborated the director client’s position that the areas of investigation could not be proven by the Insolvency Service, whilst also seeking to prove that the employee client was not (and had not been) a director of the company. In doing so, NDP assisted the clients in presenting responses to the Director Questionnaire in a way that were persuasive and thoroughly dealt with the issues at hand.
As ever, evidence played a crucial role in this Director Disqualification over Bounce Back Loan misuse investigation. Our focus was to both pursue and highlight the discrepancies in the Insolvency Service’s evidence, as well as produce the contemporaneous evidence available to the clients which supported their case.
Rather than simply sending evidence that could contradict the Insolvency Service areas of investigation, NDP worked to explain and place the evidence in the context of the specific circumstances of the case so that the Insolvency Service could easily digest the information placed before it and understand the nuances of this particular case.
NDP tackled the issues at hand across four key areas
- Eligibility Justification: NDP provided evidence which showed that, despite the Insolvency Service assumptions, the director had reasonably applied the terms of the BBLS to the company and applied for the BBL within the strict constrains of eligibility. Explanatory representations in response to the Director Questionnaire detailed an explanation of the company’s trading status, turnover calculation method, and compliance with BBLS terms.
- Appropriate Use of Funds: NDP collated relevant documents from the director client that supported the assertion that BBLS funds obtained by the company had been used within the terms of the BBLS. Such uses of BBLS money could be, for example, payments for rent, staff wages, and supplier payments.
- Roles and responsibilities: given one of NDP’s clients was said to be a director when in fact they were not, the roles and responsibilities of that client had to be explained and evidenced to the Insolvency Service’s satisfaction. Contemporaneous records of roles and responsibilities assisted in evidencing the true position.
- Public interest: Director Disqualification proceedings should only be contemplated where it would be in the public interest to seek to disqualify a director. Showing that disqualifying a director would not be in the public interest is often critical to persuading the Insolvency Service to end their investigation. NDP worked in this case to explain to the Insolvency Service how disqualification would be against the public interest.
Successful Outcome: No Further Action
Having submitted completed director questionnaires, and additional written submissions, the Insolvency Service confirmed that it would not be pursuing director disqualification proceedings against either client. This represented a significant relief for the clients, allowing them both to get on with their lives without this cloud hanging over their heads.
Take a look at some of our other successes in Director Disqualification and Bounce Back Loan Investigation cases.
One of our clients commented upon hearing the news:
“I’m relieved and grateful to learn that they do not intend to bring Director Disqualification proceedings … This news brings significant peace of mind, and I deeply appreciate your diligent representation throughout this process.”
Talk to our Director Disqualification Solicitors if facing an IS investigation over BBLS misuse and/or fraud
Allegations of misconduct by directors relating to the BBLS are being taken very seriously by the Insolvency Service and Liquidators alike, but with the right legal support and a clear evidential approach, directors can demonstrate that they acted responsibly and lawfully.
This case highlights the importance of obtaining advice and assistance early in Director Disqualification investigations, as they can often be ended at an early stage before the Insolvency Service’s position becomes entrenched and court proceedings are issued.
If you are facing an Insolvency Service Review over a BBL, contact us or call us on 0121 200 7040 for an initial free of charge discussion.
