Winding Up Petitions


Can A Winding Up Petition Be Withdrawn?

in Creditor Actions Winding Up Petitions

A winding-up petition is a serious legal notice. If your company receives one, your first priority is to get it withdrawn to avoid compulsory liquidation. Here is a guide to the process.What is a Winding Up Petition? A winding-up petition is a legal notice filed with the court by a creditor who is owed more than £10,000 and has not been paid for over 21 days. In essence, the creditor is asking the court to put the company into compulsory liquidation.The Steps to Get a Petition Withdrawn If the debt can be paid, the winding-up petition can be withdrawn, removing any further threat of liquidation. Here is a step-by-step process for getting a petition withdrawn before it’s too late.Obtain Written Permission: The creditor must get written permission from an officer of your company to settle the debt out of court. This letter should state the creditor's intention to withdraw the petition once the debt is paid. Agree on a Settlement: A settlement should be agreed upon and executed between your company and the creditor. Get Written Confirmation: Once payment is received, the creditor should notify your company in writing that the debt has been settled and they intend to withdraw the petition. Apply to the Court: Your company must apply to the court for permission to withdraw the winding-up petition. Note: This must be done at least five days in advance of the petition hearing and the petition must not have been advertised yet. You will need to provide proof of the settlement and the creditor’s intent to withdraw. Send Written Notice: Once the court has granted permission, a letter should be sent to the court and copied to all involved parties as proof that the petition has been withdrawn.Other Outcomes if a Petition Isn’t Withdrawn If the petition is not withdrawn, the following can happen:It Can Be Adjourned: The court can grant a postponement if your company can convince the court that it can pay the debt and continue to trade. Adjournment gives your company the breathing room it needs to collect money owed and prepare for an insolvency procedure. It Can Be Disputed: The petition can be dismissed by the court if you can provide proof that it is invalid or inaccurate. When this occurs, the court can order the petitioning creditor to pay hefty costs. It Can Be Dismissed via a CVA: The court can dismiss the petition if it determines your company can repay all or some of the debt through a Company Voluntary Arrangement (CVA). A CVA creates a payment plan to pay back debt over a period of 3-5 years.Final Advice If a winding-up petition is not withdrawn or dismissed, the court will eventually grant a winding-up order, and your company will be placed into compulsory liquidation. The key is to act quickly and understand all your options.For further guidance and expert advice, contact us today on 0800 970 0539. 

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Can A Winding Up Petition Be Withdrawn?

My Company’s Bank Account Has Been Frozen What Can We Do?

in Directors Duties in Insolvency and their Implications Winding Up Petitions

If your company’s bank account has been frozen, it’s likely the bank has seen a winding up petition advertised in the London Gazette or has found out the company is going into an insolvency procedure like a company voluntary arrangement (CVA) or administration.  It is rare however for the bank to freeze the account if it is in CVA.Banks have to take necessary steps to prevent what is called the "disposition of assets"  i.e. the bank doesn't want to see large sums of money being withdrawn as they are liable for any money taken out if the company is insolvent. Once the account is frozen, there are very limited options for company directors. You can prevent this from happening by seeking insolvency or restructuring advice as soon as financial issues arise. Get help with debt before a creditor can issue a winding up petition. Apply for a Validation Order A validation order can be used to gain access to the bank account.  A validation order is an expensive process but it should not be necessary if the account has been frozen due to misunderstanding etc.  It is really where a judge has to be persuaded that the company will not withdraw all the money as they fear insolvency. In the instance where a winding up petition has been served, they need to be persuaded that the company will be able to pay its debts or that an deal with its creditors can be done.  This will mean that a draft CVA is most likely needed.Seek guidance from an insolvency practitioner or turnaround advisor. If the company is viable, it may be eligible to enter a company voluntary arrangement. If the company is no longer viable and you want to close it down, consider the creditors voluntary liquidation option.My company has gone into a CVA and now the bank has frozen the account.  Why? This is actually very rare.  The bank may have received wrong or misguided information about the company and, if this is the case, you must act quickly to rectify the problem by telling the bank to contact us or your chosen advisor. The supervisor dealing with the CVA will need to explain the situation and stress the company is still trading and needs access to funding to survive the CVA. A CVA can only go ahead if 75% of creditors (by value) have approved the proposals. Regardless of whether they approved the CVA or not, if there was a majority vote to proceed, the bank should not freeze the account.If your company’s bank account has been frozen or you need some advice about your company, call us now on 0800 9700 539. One of our advisors can talk you through all the options available to your specific situation.

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My Company’s Bank Account Has Been Frozen What Can We Do?

Who is the Official Receiver?

in Winding Up Petitions

The Official Receiver is a civil servant in The Insolvency Service and an officer of the court. They will be notified by the court of the bankruptcy or winding-up order of a company.

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Who is the Official Receiver?

Partnership Winding Up

in Bankruptcy Law Partnerships Winding Up Petitions

When the partners have decided that the partnership has no viable future or purpose then a decision may be made to cease trading and wind up the partnership. Clearly such a decision should not be taken lightly and we would recommend that all other options are carefully considered and compared to the objectives of the partnership and the individual partners.

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Partnership Winding Up