The best way to stop a winding up petition and save your company from being forced into compulsory liquidation is to satisfy creditors at the earliest opportunity. You can do this either by paying the debt outright, by coming to an agreement on more manageable payment terms, or by entering into a formal insolvency process. You could also fight the winding up petition in court, if you have grounds to do so. However this can be costly and may not be achievable, depending on the circumstances.
Company Voluntary Arrangement (CVA)
A Company Voluntary Arrangement (CVA) is a payment plan that can be agreed between an insolvent company and its creditors by a licensed insolvency practitioner. A CVA sets out payment terms for all or part of the debt, allowing the insolvent company to repay the debt via regular monthly payments over a period of time. This allows an insolvent company to recover from its debt problems by making its debt more manageable. The company can continue trading to work through to solvency, without being forced into compulsory liquidation. As your appointed insolvency practitioner, we would look into your company finances to determine what your company can afford to pay back over a fair amount of time. We would then draft a proposal and negotiate with your creditors on your behalf to come to an agreement on a Company Voluntary Arrangement.
There are a number of ways that companies can raise cash in order to pay off creditors and avoid compulsory liquidation. These methods include invoice factoring, crowd funding, asset finance and private investment. As experienced insolvency practitioners, we can assess your company’s situation and determine the best finance options for you.
Company administration is an insolvency rescue procedure where an insolvency practitioner is appointed to take over control of the business, with the aim of rescuing the business from insolvency and maximising the value from the business assets. One of the major benefits of company administration is that, once a company is put into administration, all legal proceedings against the company are halted. This prevents a winding up order from being issued against the company. As licensed insolvency practitioners, we can act as your company liquidator during this procedure in order to get the company back to solvency, pay off debts to creditors, and prevent compulsory liquidation.
Pre pack administration is a procedure whereby a sale of all or part of the business and its assets is arranged prior to the company being put into administration. Once the company is put into administration, the business assets are immediately sold and the funds are used to pay off debts to creditors. As your appointed insolvency practitioner, we would value the business and its assets, and arrange for the sale of the assets to another entity. The company’s current directors are allowed to purchase the company’s assets under a new company. This is a commonly used method of ensuring that a business can continue.
Fighting the winding up petition in court
If a winding up petition has already been issued against your company, you may be able to argue against the winding up petition in court if you can prove that a substantial dispute exists surrounding the debt, or the grounds on which the application is based. It must be shown that your company has a counter-claim against the petitioning party, or that the debt in question can be set-off against monies already owed to your company by the creditor. This would also allow you to get an injunction placed against the advert in The Gazette. We can help by assessing your case and determining whether you have grounds to argue against the winding up petition in court. This is a complex process that needs to be completed under strict time limits, with specialist legal assistance.
The best time to take action to avoid your company being put into compulsory liquidation is as soon as you realise that your company is going to fall behind on its payments to creditors. By taking action before creditor pressure piles on, there is a greater chance of being able to agree manageable payment terms and avoid legal action by your creditors. Though, we may still be able to find alternative rescue solutions once a winding up petition has been issued. For more information on winding up petitions and company rescue procedures, contact us ASAP via telephone, email or the form below.