Defending companies against aggressive petitioners
What can I do if my client receives a winding up petition? What should they do?
Once the company receives a winding up petition there are now fewer options available;
The directors CANNOT put the company into creditors voluntary liquidation.
The directors CANNOT sell the company and it cannot sell the assets, as this sale may be reversed by the Court (antecedent transaction under s 127 Insolvency Act 1986).
Other than pay up there are only a few other options. There may still be time to propose a Company Voluntary Arrangement or put the company into administration.
If the company has received a petition and the business is still viable then a CVA can be used. If the creditors are not supportive then pre-pack may be the only option. However, the petition receipt means an expensive court application for administration protection.
Our firm can advise on the issues and arrange for one of our panel of lawyers to act for the client.
KSA Group has devised a fast and powerful method for dealing with winding up petitions received by our clients. This includes working with Lex Law LLP to obtain validation order from the High Court, to allow the bank to keep the account open, (if the petition is advertised the bank will usually freeze the bank accounts).
This is a powerful and unfortunately often expensive processes and it cannot guarantee that the applications WILL be successful. This generally needs to be supported by a draft CVA, draft financial forecasts and a witness statement from the directors.
KSA Group has always said that prevention is better than cure. SO; The minute one of your clients tells you he or she has received a THREAT of a winding up petition please contact our specialist advisors – Keith Steven 07833 240747 , Iain Campbell 07717 860704 or Wayne Harrison 07879 555350.
We will act fast, suggest solutions and hopefully save your client. Our initial meetings and detailed solutions report is provided free. But they must act fast.
Finally you may have noticed HMRC getting tougher with clients in 2012? If HMRC issues a threat of a winding up petition in their 7 day warning letter, then you can with some certainty tell your client that HMRC WILL issue a winding up petition 8-10 days later.
What if we do not agree with the debt, or owe the debt claimed?
If the action is clearly unfair or an "abuse of court process" then you MUST take legal advice immediately. You may be able to legally prevent the petition from being advertised and indeed have it rescinded if it is considered an "abuse". We can provide advice on this and our legal partners can assist you rapidly to STOP the Gazette advert by seeking, in rare cases, an injunction to restrain advertisement or by way of formal negotiation with the petitioner as appropriate. Otherwise, in due course the petition hearing will be advertised in the London Gazette and the hearing will be heard in the High Court of Justice (Companies Court).
If the petition has already been advertised then you could seek an adjournment of the hearing. However, in order to do this you will need sound reason(s). We have a good working relationship with expert lawyers who can analyse your situation and help you to obtain an adjournment where appropriate.
If you have not instructed a solicitor we can refer you to a specialist insolvency lawyer at a London law firm, LEXLAW whom specialises in winding up petitions and insolvency matters 0845 8622 529