Why the client needed our help
Our client, a high street pharmacy, was subject to a winding up petition which had been presented by a creditor for non-payment of trade invoices. The petition had been advertised in the London Gazette and resulted in our client’s bank account being frozen leaving it unable to pay operational costs, including staff salaries. The director of the pharmacy wanted us to help him obtain a validation order to unfreeze the company bank account and/or arrange for the petition to be dismissed by the court urgently on the basis that he had used his personal funds to clear the debt.
Our client was in a difficult position because, despite the petition debt being cleared, its bank account was frozen and the petition was not due to be heard for another four weeks. In addition, under the Insolvency Rules, an advertised winding up petition can only be dismissed at a hearing, not withdrawn in advance.
How we helped
We completed an urgent application seeking dismissal of the petition notwithstanding that it had been advertised, providing the court with evidence that:
- the company was solvent
- the company was able to continue trading profitably
- that it was in the interest of the company’s creditors as a whole for the petition to be dismissed rather than force the company to wait another four weeks
The court was satisfied with our evidence. We obtained an order dismissing the petition in advance of the hearing (despite it being advertised) which meant that the company’s bank account could be unfrozen and it could pay its staff (who had not been paid for five weeks). It also allowed the company to continue trading and saved the director from having to apply for a potentially very expensive personal bridging loan in order to fund the company while it was subject to a petition.
One of the most astute appointments I have ever made.A company director