Covid-19 ‘Bounce Back’ loan abuse

Covid-19 Bounce Back loan abuse case study:

The owner of an Indian restaurant in Cardiff went bankrupt after spending almost £43,000 of Government Covid-19 financial support and Bounce Back loan funds on drinking and gambling. The restaurant had already ceased trading prior to the beginning of the pandemic, and was therefore not eligible for any Covid-19 financial assistance schemes.

In April 2020 the restaurant owner applied for a £25,000 grant from his local council, and the following month, he applied for a £18,000 Government Bounce Back loan, both of which were approved.

Gavin Seymour, Deputy Official Receiver at the Insolvency Service, said:

“The Covid-19 support schemes generously provided taxpayer money to support genuine businesses and anyone who abused those schemes should expect to be caught and punished.”

As a result of an investigation by the insolvency service, the bankrupt was subject to a bankruptcy restriction order of 9 years which, effectively, extends the restrictions that a bankrupt individual would be subject to by 9 years. In their capacity, the Official Receiver is assessing assets available in order recover the Covid-19 support funding.

You can read more about this Bounce Back loan abuse story and further cases here: Gov.uk Business Debt & Bankruptcy News

Contact our insolvency lawyers in West Kent (Hadlow), Ashford, Brighton & Hove, and Uckfield

If you are a director of a company and are facing issues with bankruptcy and debts, or if you have questions regarding bankruptcy and financial support, please get in touch and we can discuss the various options you have available. Contact partners Richard Ludlow, Dan Sherlock or Alistair Rustemeyer in our Restructuring & Insolvency team or call 01732 441695 for an initial conversation on the various courses of action you have available.