Our team of experts regularly act for clients facing compulsory liquidation or winding up. However bleak the situation may feel, there are always things we can do to help.
Don’t delay or ignore the problem. Act quickly
If you are a director of a company and have received a winding up petition from a creditor, you need to act fast. Whether you agree or disagree with a creditor’s claim against you, failure to deal with the situation can be disastrous for your company.
It is vital that you take expert advice as a matter of urgency in order to deal with any winding up petition presented against you.
If you take early advice, the team at Francis Wilks & Jones can often prevent irreparable damage being done to your company, which can happen very fast once a winding up petition is issued.
The consequences for a company ignoring a winding up petition can be
- the winding up petition is advertised in the London Gazette only 7 days after you receive the petition;
- advertisement will have a significant detrimental publicity effect on your company, and can affect relationships with customers, suppliers and your bank;
- banks and financiers check the London Gazette pages daily, and once notified that a petition has been bought against their customer, they will freeze your bank account until the matter has been dealt with in court;
- this will make continued trading extremely difficult or impossible;
- if you don’t deal with the matter within 7 days before the petition is advertised, then even if you come to an agreement with the original creditor, another creditor who is owed at least £750 can ‘take over’ the petition and continue to wind up the company.
How we can help immediately
The sooner you seek professional help after you have received a winding up petition the better. If you contact us early our team can help you
- settle the petition claim your creditor before the hearing is advertised and other creditors take it over;
- alternatively, if a settlement is not possible because the debt is reasonably disputed, then we can act on your behalf to prevent the petition being advertised and to dispute the debt;
- if your bank account is frozen, we can apply to the court for a validation order to continue to use the bank account, to allow you to continue to trade.
Once a winding up petition is granted this brings an immediate end to the life of the company. Directors and shareholders lose control over the company, and a liquidator is appointed to collect in and distribute assets.
Any director or person considered to be a director in a liquidation will be subject to scrutiny. A liquidator is required by law to file a report for the purposes of the Company Directors Disqualification Act. In addition, any liquidator who believes that a director has been guilty of misconduct may be subject to a claim for personal liability as part of a liquidator claim.
The good news is that if you take decisive action as soon as you receive a petition, then a lot of the above risk can be avoided.
The team at Francis Wilks & Jones can assist you in this difficult time. Contact one of our friendly advisers today to discuss how.
“Having worked with Tim and Andy, the founding partners of Francis Wilks & Jones since 2003 and before at their previous practice, I thoroughly value the expertise and flexibility brought to every assignment by them and their team. As a relatively new insolvency practice, BM Advisory has carefully selected its business partners who share a similar enthusiasm to find workable solutions for our mutual clients often in distressed situations. Francis Wilks & Jones fits this bill well and we would have no hesitation in recommending the firm to anyone who requires a sound law firm who are approachable and easy to talk to.”
Andy Pear, partner at BM Advisory