Insolvency Litigation – Winding Up
We act in matters where clients are looking to petition for the winding up a creditor as well as acting for Trustees and insolvency practitioners entrusted with the affairs of acting on behalf of an insolvent estate. Equally, we possess the necessary experience and expertise to in assisting defendants or respondents in resisting winding up petitions. Given our that we possess an all round and broad based expertise to act from both sides of the court, our expertise and experience in insolvency matters is second to none.
If the debt is owed by a limited company then you can issue a Winding Up Petition.
If a Winding Up Petition is issued then the debtor company has very limited time in which to act. The company has 7 days to either pay the debt in full, engage with their creditor to question the validity of the debt or enter into an arrangement.
After the petition is issued you have a few options to consider, but regardless of the course of action you choose to pursue, it must be done without hesitation; if the Court grants the winding up order it will be too late. You have 7 days to either pay the debt in full, pursue an arrangement, or engage in a dispute with the creditor if the debts are questionable.
After a Winding up Petition is presented to the court, and the court subsequently accepts it, a copy will be sent to the company.
The next practical stage is advertising the Winding Up Petition. This involves an advertisement being placed in a publication known as the London Gazette. A creditor must wait at least 7 days after the petition is issued before placing the advertisement. If a petition has not yet been advertised then it may be possible to restrain advertisement of the petition by using an injunction.
Once a petition is advertised then it is not uncommon for banks to freeze the bank accounts of the insolvent company to prevent the directors from disposing of assets illegally. If the court grants a Winding Up Order then a Receiver will be appointed to act in respect of the affairs of the insolvent company. At this point there is little or nothing that can be done to prevent the company being liquidated. The Receiver may also investigate the previous actions of the directors to see if they have engaged in acts of wrongful trading, in which case they can be held personally liable for some of the debts of the company.