Defending Winding Up Petitions
We specialise in defending winding up petitions presented against companies for the non-payment of a demand or debt. We negotiate debt with creditors for our corporate clients.
A winding up petition is a very serious matter and can lead to your company being placed into liquidation if it owes more than £750. The fees to wind up a company are £280 for a court fee and a petition deposit of £1,600. The winding up petition is presented to the High Court if the company’s “paid up share capital” exceeds £120,000. This can be found by searching the Companies House register. The creditor is required to send a 21 day statutory demand for payment of the debt.
It is possible to reverse a winding up order within 7 days on the ground that the Court did not have all the relevant facts or a shareholder or creditor can apply to stay (freeze) the liquidation procedure following the making of a winding up order.
Advertisement of a Winding Up Petition
The advertisement of a winding up petition can damage a company. A company only has 10 days from the date of the winding up petition to prevent the winding up being advertised. We can assist in delaying the advertisement of the petition to allow time to enter into negotiations with creditors as banks will trawl the legal press and freeze any company’s bank accounts having had winding up petitions presented against them. The banks also call in overdrafts as a result, damaging a company’s financial position even further.
We can assist in obtaining a Validation Order from the Court to allow directors to access funds or dispose of the company’s assets, in the event a company winding up petition is presented.
We specialise in obtaining injunctions in the High Court where the petitioning creditor refuses to refrain from presenting or advertising the winding up petition.
Once a winding up petition has been presented to the Court, directors will be unable to sell the company or any of the company’s assets. In the event any assets are transferred or disposed of, the Court can subsequently set aside any such transactions. The ultimate ownership, also known as "beneficial ownership" of the assets within a company is not always clear. We ensure that directors or shareholders are able to retain any assets which may belong to them personally. We also establish whether third parties have rights over the assets used in the company as they may have paid towards their purchase.
Company Voluntary Arrangements (CVA)
If a creditor winding up petition has been presented against a company, the company cannot subsequently be placed into voluntary liquidation by the shareholders without the permission of the Court. However, a CVA may be possible. We advise directors on the best option to take. If a CVA is entered into, the company's creditors cannot take legal action against the company. A CVA therefore brings a serious advantage to the company.