Public interest winding up petitions are very serious court applications. If a company is wound up in the public interest, a director disqualification claim will inevitably follow. Our brilliant team can help defend petitions and advise on the threat of disqualification. Let us help.
Public interest protection
The term “public interest” is pervasive to many areas of the legal framework within the UK.
It extends from legislation granting or extending rights granted to the general public (in the public interest), the courts judicially reviewing interpretations of the law by government (as far as it may extend to procedure or the application of the law) through to specific litigation claims issued “in the public interest”.
- without these public interest protections, the risks to individuals and companies in the UK will almost certainly increase
- whilst a precise list of such risks would be difficult to provide, without doubt they include financial fraud and prejudice to specific groups of people or organisations within the UK including the general public as potential customers of companies acting in a fraudulent manner
It is against this background that there is the ability to wind up companies which are not perceived to be acting in the public interest – for example if the company is committing fraud against the general public.
Defending a public interest winding up petition
Where a public interest winding up petition is presented, there is no requirement to provide evidence that the company is insolvent or otherwise unable to continue trading in its present form. The only requirement is to demonstrate that the company is trading contrary to what the Secretary of State believes is the public interest.
In a majority of circumstances a public interest winding up petition is properly presented against companies which are trading solely for the purpose of defrauding the general public.
However, this is not always the case.
- quite commonly companies may be selling new products, or seeking investment for projects that may take years to develop (indeed a lot of research and development companies exist in an insolvent state, reliant on investment with an uncertain outcome for the product they are trying to develop)
- in such circumstances there are strong grounds to defend a public interest winding up petition
Consequences of a public interest winding up petition
If a winding up order is made by the court, whether it was defended or not the likely outcome is that almost certainly the Secretary of State will seek a disqualification proceedings against the directors who ran the company.
Whilst a disqualification order is not guaranteed, directors would be wise to seek legal advice upon receiving notice of the intention to issue a disqualification claim based on the fraudulent misconduct.
If a director decides to cut his/her losses and offer a disqualification undertaking or is subsequently disqualified in proceedings then s/he faces the further risk of being subject to a compensation order.
You can read more in our other web pages about the consequences of a director being disqualified.
Public interest proceedings generally
To understand the relevant stages leading to a public interest winding up petition order, and the impact thereafter, please visit our webpages dealing with the following aspects of these types of proceedings:
- complaints to the Secretary of State
- companies investigations
- winding up petitions / orders
- impact on director disqualification
Whatever your situation, we have the team to assist.
At Francis Wilks & Jones we have extensive experience of these matters and are able to advise and assist on circumstances where you face the threat, or are subject to, public interest winding up proceedings. Please call any member of our disqualification team for help now.
I was greatly impressed with the commercial, tactical and technical ability of the team at FWJ. They quickly got to grips with a complex set of facts and, through their hard work, had the proceedings against me dropped and a significant proportion of my legal fees repaid. I couldn’t recommend them highly enough.A director we defended against a disqualification claim and other claims brought by a liquidator
SMEs, directors & shareholders
Successfully defending three directors against director disqualification proceedings and stopping a claim from the liquidator
We were instructed by three directors of a company which had been placed into liquidation, The directors faced Disqualification proceedings in respect of certain pre-insolvency...