A winding up petition is regarded as the most serious step a creditor can take to recover money. If not dealt with, a winding up petition hearing will lead to a compulsory liquidation and a subsequent investigation of director conduct, by the Official Receiver.
There are a number of considerations with a winding up petition and we can offer practical advice in relation to the winding up petition hearing. We can advise on strategy and arrange legal representation at court hearings, for either adjourning a winding up petition (temporarily suspending the process) or the dismissal of the petition.
To summarise the process:
- A creditor may issue a statutory demand or obtain a court judgment, as a preliminary step before filing a winding up petition. However this does not always happen and HMRC or a creditor with a liability order, may skip this step. Usually a petition is filed in the High Court, but proceedings can be in a county court.
- Often a solicitor is instructed by the petitioning creditor, to plan for the winding up petition hearing and find counsel to attend at the hearing
- The petitioning creditor’s solicitor informs the debtor company of the winding up petition and the hearing date, by way of service of the petition at the registered office of the debtor company. It is not a legal requirement that notice is served at the debtor company’s trading address
- The London edition of the Gazette will advertise the hearing details, possibly only seven days after service of the winding up petition – meaning that the process is in the public domain and typically that the debtor company’s bank account is frozen – preventing access to cash needed to pay wages, suppliers and HMRC
- Normally, 6-10 weeks later, there will be the winding up petition hearing for the court to decide:
- if compulsory liquidation should happen (and so a winding up order would be made) or
- if there are circumstance for an adjournment whilst options are investigated or
- if there should be a dismissal of the winding up petition if an agreement can be reached
Note, it is not unusual for a winding up petition hearing to be adjourned several times.
If liquidation is to happen, it is known as a compulsory liquidation and in the majority of cases this is dealt with initially by the Official Receiver. If the debtor company’s business has not already closed and is still operating by then, the Official Receiver will close the business - liquidating its assets and investigating director actions.
Depending on circumstances, it may be that liquidation is the unavoidable consequence of a winding up petition hearing. However, with the right expert help, often a compulsory liquidation is avoidable and it is possible to achieve the dismissal of a winding petition.
It is imperative to act quickly - to avoid a winding up petition hearing if possible and to obtain a dismissal of a winding up petition.
Once a winding up petition has been filed, there may be just seven days to act before it becomes public knowledge - and so time is of the essence. You should contact us for advice on your options at the earliest opportunity.
Why choose us? There is a myriad of people and organisations claiming to be able to deal with this issue. Not getting the right help, could be terminal for your business.
- We have experienced, specialist staff who are dedicated to dealing with obtaining dismissal of winding up petition and adjourning a winding up petition hearing
- We have a panel of specialist legal counsel, who we arrange to attend and represent you when required – at discounted rates
- We have dedicated people dealing with winding up petitions, who have extensive experience of court procedures
- We work with you, to proactively manage your strategy and achieve the best outcome
