If your company bank account has been frozen because of a winding up petition – we can help. A validation order application is normally the best way to proceed, allowing use of the bank account and to continue trading - plus avoiding the risk of personal liability as well. We have been helping businesses since 2002. Let our team of experts help you too.
Notify all relevant parties first
Other than in exceptional circumstances, you will need to notify the following parties that you are applying for a validation order:
- the person who filed the winding-up petition (the respondent);
- any person entitled to receive a copy of the petition;
- any creditor who has given notice to the petitioner of his intention to appear on the hearing of the petition;
- any creditor who has been substituted as petitioner.
Prepare a detailed witness statement to support your application
Your application should be supported by a witness statement which is normally made by a director or officer of the company who is intimately acquainted with the company’s affairs and financial circumstances. If appropriate, supporting evidence in the form of a witness statement from the company’s accountant should also be produced.
The extent and contents of the evidence will vary according to the circumstances and the nature of the relief sought, but in the majority of cases it should include, as a minimum, the following information:
- when and to whom notice has been given;
- the company’s registered office;
- the company’s nominal and paid-up capital;
- brief details of the circumstances leading to the presentation of the winding-up petition;
- how the company became aware of the presentation of the petition;
- where the petition debt is admitted or disputed and, if the latter, brief details of the basis on which it is disputed;
- full details of the company’s financial position, including details of its assets (including details of any security and the amount(s) secured) and liabilities, which should be supported, as far as possible, by documentary evidence, eg the latest filed accounts, any draft audited accounts, management accounts or estimated statement of affairs;
- a cash flow forecast and profit and loss projection for the period for which the order is sought;
- details of the dispositions or payments in respect of which the order is sought;
- the reasons relied on in support of the need for such dispositions or payments to be made;
- any other information relevant to the exercise of the court’s discretion;
- details of any consents obtained from the persons mentioned above (supported by documentary evidence where appropriate); and
- details of any relevant bank account, including its number and the address and sort code of the bank at which such account is held and the amount of the credit or debit balance on such account at the time of making the application.
Interim help can be given if the situation is very urgent
Where a validation order application is made urgently to enable payments to be made which are essential to continued trading (eg wages) and it is not possible to assemble all of the evidence listed above, the court may consider granting limited relief for a short period. However, there will need to be sufficient evidence to satisfy the court that the interests of creditors are unlikely to be prejudiced by the validation order application.
Certain assets might need an independent valuation
Where the validation order application involves a disposition or sale of property, the court will need details of the property (including its title number if the property is land) and to be satisfied that any proposed disposal will be at a proper value. Accordingly, an independent valuation should be obtained and included in the validation order evidence.
The court will need to be satisfied by credible evidence either that the company is solvent and able to pay its debts as they fall due or that a particular transaction or series of transactions in respect of which the order is sought will be beneficial to or will not prejudice the interests of all the unsecured creditors as a class.
A draft of the validation order sought should be attached to the application.
Similar considerations to those set out above are likely to apply to validation order applications seeking ratification of a transaction or payment after the making of a winding-up order.
Please contact one of our friendly expert winding up petition solicitors now for your validation order consultation. At Francis Wilks & Jones, we have a team of dedicated winding up petition and validation order experts ready to take your call and help you make payments from frozen bank accounts and help you to continue trading.