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How can I adjourn or stop a winding up petition?

1st April, 2022
Robert Moore

Written ByRobert Moore

Marketing Manager


+447584583884

Rob has over a decade of experience in web and general marketing. He has extensive knowledge of the Insolvency sector and has helped many worried directors with their questions.

Rob is now working with the Board at KSA Group Ltd to develop strategic marketing programmes to support the business plan and drive more company rescues.

Robert Moore
  • Adjourn or stop a winding up petition

Adjourn or stop a winding up petition

In order to stop a winding up petition taking effect once it has been issued then you need to act quickly to save your business! The court, which has the power to grant the winding up order, also has the power to grant an adjournment of the hearing at which the petition is presented. An adjournment may be granted if the court can be persuaded that the company needs more time to come up with the money or that the amount of the debt is disputed. It may be that the company can come up with all the money owed at a later date. For example, the sale of a valuable asset currently on the market but not having the money immediately available. However, if the debt is in dispute, and this can be proven, then the court has the power to dismiss the application.

 

Warning:  case law has indicated that the service of a winding up petition might make it harder to trade.  All transactions will be voided if the company goes into liquidation which will mean that suppliers and advisors will not be willing to continue to support the company as a subsequent liquidator will demand all monies back.  See this page for more details which will be updated as the situation changes.  In essence, seek advice the moment your company receives threats of a winding up petition.

Reasons for Adjournment

It should be borne in mind that if the court is to adjourn the hearing they will need a good reason. As such, you will need a barrister to argue the case, backed up with documentary evidence. We have a number of people we can recommend who will can help you so please ask for details.  A first adjournment can cost just c.£400 if your evidence is produced quickly and clearly.

If the company is unlikely to be able to pay off the whole debt then the company may get the petition adjourned and withdrawn if the directors propose a company voluntary arrangement (CVA). We have on numerous occasions had winding up petitions withdrawn after presenting a draft CVA to the court. However, in order for this to be successful we do need time to prepare the draft so it is always pays to act in time. Please read our case studies on how we have defeated winding up petitions by proposing CVAs.

One way to stop a winding up petition (WUP) being issued is to serve a notice of intention to appoint an administrator. Once this is notice has been sent to the court a moratorium is created over the company preventing any creditor from starting any legal action, such as a WUP, or continuing any existing legal action against the company without express permission from the court.  The directors can file such a notice and so can the floating charge holder. This can be done very quickly once the insolvency practitioners have agreed to act and a lawyer has been instructed.  The process is a bit more expensive but is usually only done as a last resort.  The insolvency practitioners and the directors will usually seek a sale of the business in this time or a further injection of capital.

Do not delay and call us on 08009700539 or out of hours you can call on 07974 086779
Call a local office and one of our Regional Managers will come and see you, free of charge.

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Worried Director What Will Happen To Me After Liquidation?

in Company Liquidation What is …?

"A man in the pub said I cannot be a director of any other company if I liquidate my company. Is this true?"Actually, this statement is entirely false! Misconceptions like this frequently arise from individuals with limited understanding of the subject matter. Such misinformation can cause undue anxiety for directors considering liquidation, fearing it might personally affect them. Guess what? Listening to bar room experts, inexperienced accountants, or no insolvency specialist lawyers can stop decisions being made, this failure to make a decision is really what could land you in trouble. So how will liquidation affect me and how long does it take? Having a limited liability company means that the directors have little risk (or limited liability) if the company fails, as long as they have acted properly and acted in time. What is more, if as a director, you have been compliant and on the payroll for many years, you can actually claim redundancy from the government like any other employee. But, and it is a big but, if you fail to act in time, fail to act reasonably, fail to keep books and records, continue taking credit KNOWING that the company cannot possibly repay it, then you ARE at risk of personal financial loss or worse such as losing your house. So, act now and get help for your company and more importantly start reducing your own risks.Voluntary liquidation is the quickest most efficient way to deal with an insolvent company that has no future. As a director of an insolvent company, you are at risk if you do not act. This risk RISES the longer you don't act to put the company into liquidation.If you fail to act and the company is wound up by the creditors (compulsory liquidation) then the Official Receiver (OR) will be appointed to liquidate the business and he or she will investigate the activity of the directors and the business over the last 2-3 years. This is known as a conduct report on each director.  If the OR can prove there was wrongful trading where, for instance, you have taken credit from a supplier or took deposits from customers when you knew that it was highly unlikely that you could pay them back, then you could be made personally liable.This is known as the "lifting of the veil of incorporation" that protects directors under limited liability. If this happens then you could made liable for PAYE, VAT and creditors monies from the time that you should have known the company had no reasonable prospect of surviving the problems it faced.Additionally, the directors may face disqualification proceedings under the Company Directors Disqualification Act 1986 for up to 15 years, they can be fined and may face the loss of personal assets like your home, or even personal bankruptcy.Look, if you as directors have acted naively you may not know that you have broken these laws, but now you do know, it is vital to ensure that you protect yourself as a director by acting quickly to cease trading and put the company into voluntary liquidation; or consider a company voluntary arrangement if the company is VIABLE if the problems are solved. What is Creditors Voluntary Liquidation and what does it mean for me? In short, liquidation usually means, the company's trading stops and it's assets are turned into cash or "liquidated".All other possible liabilities, like employment liabilities, landlord's rent or payments to lease companies are stopped. It really is the end of the company, but the "business" may survive if a phoenix is organised. Liquidation is a powerful way to END creditor pressure and let you get on with your life. What if I have signed personal guarantees? If you have signed personal guarantees or indemnities to lenders, then the liquidation could lead to them being called in if the bank cannot get its money back from the company. There is little that can be done about that, but you should not delay decisions on liquidation to try and prevent a PG being called in: just think what ALL of the company's debts landing on your shoulders would do. Also it should be noted that HMRC now rank ahead of floating charge holders in any liquidation since December 2020.  Consequently, this may well mean that lenders that you have personally guaranteed will get less recovery hence exposing you more.All banks will agree a deal to repay the PG over time - provided you work with the bank to reduce their exposure.One great piece of FREE advice - always make sure that ALL tax returns, VAT returns and annual returns have been completed and sent in and that other "compliance" issues are dealt with wherever possible. These are important processes and will help protect you as individual directors. It shows that you have been acting properly.  I have heard about directors being able to claim redundancy in liquidation If you have been employed by the company and made payments via PAYE then you will be able to claim redundancy from the government and this is in fact a very simple process (20 minutes to fill out a form and we can help with that) so there is no need really to employ a third party to make a claim.  This process has been open to fraud so the HMRC are cracking down on operators that claim to be able to get money back when there is not enough "paperwork".  It isn't worth the risk.  If it sounds too good to be true then it probably is!You need to learn more about the options. This is clearly a general guide so, if you have any worries at all, please, just call us and we will talk you through the situation free and with expert guidance for your situation. Call one of our advisors or if you prefer, call our IPs (insolvency practitioners) now:Just one CALL will help relieve the stress and get you out of the mess.Why not call 08009700539 or 020 7887 2667 now?We could help you start the liquidation process today.(8.15am till 5.00pm; Out of hours call on 07833 240747, Wayne Harrison (IP)  or Eric Walls (IP) on 07787 278527)Finally, please remember this: NO BUSINESS is worth losing your health, relationships, marriages or your children over. Act properly, take advice, get the problem sorted and then get on with your life. In a little while the stress will go and you can focus on other things that are more important.Want more information on liquidation? Get our new free 2023 Experts Complete Guide to Creditors Voluntary Liquidation that covers Bounce Back LoansWe are experts in liquidation, voluntary liquidation, administration, pre-pack administration, business rescue, corporate rescue and company rescue, we can help solve your problems but only if you talk to us. Call 0800 9700539 for help.or email us your worries at help@ksagroup.co.uk 

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Worried Director What Will Happen To Me After Liquidation?
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Notice of Intention To Appoint Administrators

A notice of intention to appoint administrators is when the company files a document to the court to outline that it intends to go into administration if a solution cannot be found to its immediate financial problems. It can be used as part of the pre-pack administration process as well as used to restructure a failing business to avoid its liquidation.

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A winding up petition is a legal notice put forward to the court by a creditor. The creditor petitions to the court if they are owed more than £750 and it has not been paid for more than 21 days. The application, in effect, asks the court to liquidate the company as they believe the company is insolvent.

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