Director bitten by abuse of ‘Eat Out to Help Out’ scheme
The Insolvency Service are pursuing directors for disqualification claims arising out of other Government support grants.
Following the influx of director disqualification claims by the Insolvency Service on behalf of the Secretary of State for Business, Energy and Industrial Strategy in relation to allegations surrounding failures to account for bounce back loans, we are now seeing the Insolvency Service pursuing directors for disqualification claims arising out of other Government support grants, for example, the ‘Eat Out to Help Out’ scheme.
Recently, the Government published a press release following a seven year disqualification undertaking accepted by a director of an insolvent company for wrongly claiming £30,000 through the Eat Out to Help Out scheme, in addition to £20,000 through the Coronavirus Job Retention scheme.
At the same time, we are seeing a rise in the threat of director disqualification compensation proceedings by the Insolvency Service against former directors.
The Insolvency Service, on behalf of the Secretary of State, has two years from the date of either accepting a director disqualification undertaking or disqualification court order to apply for a compensation order (or alternatively, to accept a compensation undertaking) against a former director of an insolvent company. There are a number of factors the Insolvency Service on behalf of the Secretary of State is required to consider before issuing any court claim for director disqualification compensation proceedings, particularly in light of the lifelines thrown to small businesses which were struggling during the COVID-19 (repeated) lockdowns.
Our team of insolvency solicitors has a breadth of experience in acting for officeholders pursuing director misfeasance and antecedent transactions. New additions to the team also have a strong track record in defending director disqualification and compensation order claims by the Insolvency Service on behalf of the Secretary of State.