How challenging a Winding Up Petition can save your company
A winding up petition against your company can lead to liquidation and closure swiftly. Understanding your rights in such a scenario is crucial. You may seek to have the petition ‘set aside’ by the court.
This defines its cancellation, yet it’s essential to ensure your reasons for requesting it are genuine. You must present them with great supporting documentary evidence in detail.
With only seven days to prepare your defence, prompt action is crucial.
What grounds could you request the court to set aside a winding-up petition?
What would be the possible grounds for a winding-up petition to be set aside?
1. You hold a counter-claim against the creditor
If the petitioner owes your business more money than you owe them, you can offset it against your debt. This action eliminates the debt, requiring no further action from the creditor for this specific debt.
2. The debt is significantly disputed
If a creditor has filed a winding-up petition despite a genuine and substantial dispute over the debt, they are misusing the court process. You can request an injunction to prevent them from publicly advertising the winding up petition in the Gazette.
An advertisement in the Gazette could prompt the bank to freeze your accounts, making prevention crucial. Disputes may arise from differing interpretations of contract terms or conditions, or from the belief that ordered goods were defective.
3. Technical or procedural mistakes
Winding-up petitions need to be factually accurate and served correctly to be lawful. Errors can occur if the petitioner has not sought professional advice.
A winding-up petition can be delivered to the company’s registered address or handed to a director, officer, or employee. If not hand-delivered, it can also be affixed to the door of the company’s registered office.
Read More:
- My business bank account has been frozen – what can I do
- Understanding a Creditor’s Petition and the process that follows
- Statutory Demands Advice for Company Directors
- What is the difference between a Statutory Demand and a Winding Up Petition
- How to Wind up a Limited Company
Exploring the overall process of setting aside a winding up petition?
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- If the petition has already been served, you might secure an injunction to halt its publication in the Gazette.
- A witness statement opposing the winding up petition must be filed at the court at least five business days before the hearing. Additionally, a copy of the statement and supporting documents should be provided to the petitioner.
- Another option could be to request an adjournment, giving you time to consider company administration as a potential solution. Company administration is an official insolvency process that offers your company protection against creditor legal action.
- If you believe your company could repay the debt with a bit more time, seeking an adjournment of the hearing date might be an option. This could give you the opportunity to restructure or reorganise your affairs.
As a company director, you can present your case at the petition hearing, but it’s recommended to seek legal representation. Vanguard Insolvency possesses extensive experience in handling winding-up petitions and can offer the professional assistance you require.
If your business has received a winding-up petition, swift action is essential. Please get in touch with one of our team members to schedule a free same-day consultation. With over 100 offices, we can promptly determine the next steps to take.
I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.