Two landlords have been handed suspended jail sentences for abusing a Covid Bounce Back Loan then dissolving their company to avoid paying it back.
Couple Matthew Wright, 54, and Karl Mathers (pictured), 50, both from Liverpool, had run Northgate Property Associates Ltd in the city since 2013, using it to collect rental income on a property the pair rented out.
Both were directors of the company. The pair, whose business activities include running a hairdressing business, are well-known in the city after making headlines during the early noughties as one of the first gay couples do adopt a child within the city.
Liverpool Crown Court heard that Wright applied for a £30,000 loan on behalf of the firm in May 2020.
But following an Insolvency Service investigation it was discovered that two days after applying for the loan, the pair withdrew the full amount from the company bank account and paid £21,500 into their joint bank account and £7,450 into Wright’s personal account.
The next day they moved £30,000 from their joint account into Wright’s mother’s bank account. Shortly afterwards the couple withdrew another £1,600 from the company to spend on a loan and other expenditure unrelated to the business.
Within six days of applying, the pair took steps to close the company, and applied to Companies House to strike off Northgate Property Associates from the register. Neither informed the bank that they planned to dissolve the business, breaching a legal obligation to inform any creditors.
Wright was sentenced to 14 months imprisonment for each offence of fraud and of failing to tell the lending bank that their business was to be dissolved. The two sentences will run concurrently, suspended for 18 months.
Mathers (pitured) received 10 months’ imprisonment, suspended for 18 months, for failing to inform the bank they had applied to dissolve the business.
Almost £29,000 is still owed towards the loan which the Insolvency Service continues to work towards recovering.
Pic credit: Instagram/Shutterstock/Pandora Pictures/