Many of you will have seen on social media platforms like LinkedIn and in the press countless reports of directors punished for abuse of the Covid 19 pandemic support schemes including the furlough and bounce back loan schemes.
The insolvency profession is required in every case to identify whether the insolvent entity took out a bounce back loan and report that matter to The Insolvency Service who then in every case requires the insolvency profession to make enquiries to establish whether there is evidence of abuse or fraud relating to the obtaining of the bounce bank loan and whether that loan has been used for improper non business purposes.
It is important that directors of insolvent companies recognise this reality and are well advised to ensure that if they are thinking of liquidating their company which has a bounce back loan in it, they take steps to work with insolvency practitioner firm they instruct and their existing accountants to, before they press the button to liquidate, prepare financial accounts or other documents that evidence how the bounce back loan monies have been spent, so they know, before they press the button to liquidate, whether they are likely to have a problem or not.
Too many times we have seen directors liquidating their company thinking that their bounce back loan abuse activities will be swept under the carpet, only to find that the insolvency practitioner they have instructed has now reported the abuse to the authorities and is taking legal action against them.
Redman Nichols Butler adopts a completely open and transparent approach that encourages directors to identify with the help of their accountants whether they have a problem before they press the button to liquidate. No hidden agendas, no part truths, just honest fair and transparent advice.