Bank loan

Director disqualified after taking out Covid support loan

The owner of a fulfillment business was banned from acting as a manager for seven years after taking out a Bounce Back loan when he knew his business was already insolvent.

Christopher Pearson was the sole director of rugby firm Pick It Pack It Send It Ltd at the time of the offense.

On June 16, 2020, Pearson was informed by an insolvency practitioner that Pick It Pack It Send It was insolvent and that any further trading is not expected to make matters worse for its creditors.

On July 27, 2020, he applied for a taxpayer-backed £ 50,000 Bounce Back loan. The program targeted small businesses to help businesses weather the pandemic.

The maximum loan amount available through fast-start financing was £ 50,000.

The Insolvency Service report on Pearson’s behavior indicated that on July 28, 2020, BBL funds of £ 50,000 were transferred to Pick It Pack It Send It’s business bank account.

On the same day, Pearson transferred £ 38,000 of BBL funds from the company’s business bank account to his personal bank account, “contrary to the terms of the BBL agreement which stipulates that BBL funds are to be used for the economic benefit of the company. the company ”.

Pick It Pack It Send It ceased operations on October 22, 2020.

At the liquidation on December 29, 2020, the BBL of £ 50,000 remained unpaid.

Other creditors owed £ 153,628, including £ 37,730 to HMRC for VAT and £ 76,514 to trade and expense creditors.

Pearson was disqualified from acting as a director for seven years, effective November 29, 2021.

In the most recent Pick It Pack It Send It accounts, for the year to February 28, 2019, the company employed 13 people and had equity of just £ 3,896.

The Bounce Back loan program closed to new requests and add-ons on March 31, 2021. More than 1.56 million loans have been approved through the program, with a total value of £ 47.36 billion.