How to Stop a Winding Up Petition Against Your Company


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Have you received a winding up petition against your company? ARC Costs can introduce you to a firm of solicitors who can advise you on how to stop a winding up petition and assist you in the process.

What is a winding up petition?

A winding-up petition refers to a legal document filed in court by a creditor or sometimes the company itself, seeking the liquidation (winding up) of a company. This is a formal legal process that may lead to the company’s assets being sold to pay off its debts.

The petition is typically filed when a company is unable to meet its financial obligations, and it is seen as a last resort for creditors to recover the money owed to them. Before filing a winding-up petition, creditors usually issue a statutory demand to the company, giving them a specified period to settle the debt. If the debt remains unpaid, a winding-up petition can be pursued.

The winding-up petition is typically presented to the Companies Court, which is a division of the High Court of Justice in England. The court considers the evidence presented, including witness statements and any applications for validation orders, before deciding whether to grant the winding-up order.

Once a winding-up petition is filed, the court will review the case. If the court grants the petition, it may lead to the appointment of a liquidator who will oversee the sale of the company’s assets to pay off its debts. This process is a significant step and often signifies the end of the company’s operations.

It’s important to note that the winding-up process is different from other insolvency processes, such as entering administration or voluntary liquidation, and it is typically used when there is no realistic prospect of the company continuing to trade.

How to stop a winding up petition

Stopping a winding-up petition can be challenging, but there are a few potential strategies that a company can explore. Keep in mind that legal advice should be sought promptly in such situations, as the specific circumstances of each case can vary. Here are some general steps that a company may consider:

Negotiate with creditors:

Open communication with creditors is crucial. Try to negotiate payment terms or a settlement to resolve the debt without going through the winding-up process.

Apply for an adjournment:

If a winding-up petition has been issued, the company may apply to the court for an adjournment or injunction to prevent the winding up from taking place. This can provide additional time to address the outstanding debts or negotiate a resolution.

Dispute the debt:

If there is a genuine dispute about the debt claimed in the petition, the company can dispute it. Providing evidence to the court that the debt is contested may lead to the petition being set aside.

Seek legal advice:

Consult with a solicitor or licensed insolvency practitioner who specialises in corporate law and insolvency. They can provide guidance based on the specific details of the case and help formulate an appropriate strategy.

Explore alternative insolvency procedures:

Consider alternative insolvency procedures, such as Company Voluntary Arrangement (CVA) or administration, which may allow the company to continue trading while addressing its financial difficulties.

Demonstrate solvency:

Provide evidence to the court that the company is solvent or has a reasonable prospect of becoming solvent. This may involve presenting a plan to address the outstanding debts.

Pay the debt:

If financially feasible, paying the debt in full before the court hearing can lead to the withdrawal of the winding-up petition. You may also wish to explore other payment options, such as a “Time to Pay” arrangement.

It is crucial to act promptly and seek professional advice to determine the best legal action based on the company’s specific circumstances. Ignoring a winding-up petition can lead to serious consequences, including the company being forced into compulsory liquidation.

What happens if a winding up order is granted?

 If a winding-up order is granted, it signifies that the court has approved the liquidation of a company. Once a winding-up order is granted, the company’s bank accounts are typically frozen. This is done to prevent further transactions and to safeguard the assets for distribution to creditors during the liquidation process.

The fact that a winding-up order has been granted is usually published in the London Gazette. This public notice serves to inform creditors, shareholders, and the general public about the company’s liquidation. It also provides details about the appointed liquidator and the deadline for creditors to submit their claims.

After a winding-up order is granted, the company enters into a formal liquidation process overseen by a licensed insolvency practitioner, who is appointed as the liquidator.

The primary objective at this stage is to realise the company’s assets, settle its liabilities, and distribute any remaining funds to creditors in accordance with the statutory order of priority.

The liquidator takes steps to sell the company’s assets, such as property, inventory, and equipment, to generate proceeds for distribution. Creditors are notified of the liquidation, and they are given an opportunity to submit their claims to the liquidator.

Once the liquidation is complete, the company is formally dissolved, and its legal existence comes to an end. Any remaining assets, if any, after satisfying the claims of creditors, may be distributed among shareholders in accordance with their respective rights and entitlements.

How can ARC Costs assist?

ARC Costs can assist will all aspects of claiming or defending winding up petition costs.

ARC Costs are a team of independent and experienced Costs Draftsmen and Costs Lawyers who regularly assist you in the recovery/contention of costs.

Whether you are the Paying Party or the Receiving Party, we hold vast experience in dealing with costs matters on both sides.

We can assist in fixed recoverable costs cases and cases where costs are awarded on the standard basis, including the preparation/challenging of Bills of Costs, conducting of detailed assessment proceedings, and the preparation of Points of Dispute/Reply.

Should you require our assistance or have any further queries regarding costs, please contact us on 01204 397 302 or email one of the team at Alternatively, please complete our online enquiry form, and we will contact you to discuss your query or speak to our staff using the live chat function.

If you would like more information on how to stop a winding up petition, ARC Costs also maintain an extensive legal network of expert Solicitors in this area, and we would be happy to pass on your details to assist.

We may receive payments from third party solicitors on our panel to whom we may refer your claim. We will never charge you for any referrals made to our panel of third parties.


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01204 397302

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