Ignoring a winding up petition in the hope that it goes away is never a good idea. The creditor is highly likely to continue with the petition and as soon as it is advertised in the London Gazette, that can spell the end for the company. Our brilliant team deals with 100's of petitions and successfully resolves many of them. Let us help you.
The dangers of ignoring a winding up petition
- to obtain a winding up order, the petitioning creditor will need to an advert in the London Gazette advertising the petition;
- this makes the petition known to the public and the winding up petition will often then be supported by other creditors of the company;
- it can also lead to a situation of “Winding up petition bank account frozen” whereby the bank finds out about the petition and freezes the bank account;
- the petitioning creditor will then arrange for attendance at the winding up petition court and following the filing of all relevant paperwork, will ask for a winding up order to be made by the judge at court.
Personal claims against former directors
Some directors believe that once a winding up order is made, this is the end of their involvement in the matter. This is not correct. It can in fact be the start of another lengthy process as the liquidator of the wound up company will investigate the company and is officers.
The ex-director will be expected to cooperate with those enquiries and ultimately, subject to the findings of the liquidator, the director may face one of a number of different liquidator claims against him/her personally depending on what went on in the company.
These could be as follows:
- a claim for fraudulent trading pursuant to Section 213 of the Insolvency Act 1986;
- wrongful trading pursuant to Section 214 of the Insolvency Act 1986;
- a misfeasance claim or a breach of duty claim pursuant to the Companies Act 2006;
- possible director disqualification proceedings commenced by the Secretary of State seeking disqualification of the director for between 2 to 15 years.
Therefore, when faced with a winding up petition, it is always best to not ignore it and at seek some legal advice as to the best ways to protect the company and also yourself if you are a director or involved in the management of the business. At Francis Wilks & Jones, we can assist you with this process.
Francis Wilks & Jones is the county’s leading firm of winding up petition solicitors. We are experts in what we do. Whatever your winding up petition enquiry, we can assist.
One of the most astute appointments I have ever made.A Company Director