If your company has been served with a statutory demand and is being threatened with the presentation of a winding-up petition, you can apply to the court for an injunction to restrain the presentation of the petition. If you have already been served with a winding-up petition, you can apply to the court for an injunction to restrain the advertisement of that winding-up petition.
There is a cost for these applications and it is important to take advice on your likelihood of success. Before making the application, another option is to write to the other side in response to the statutory demand explaining the steps that will be taken if the winding-up petition is presented.
The court will only grant an injunction to restrain the presentation or advertisement of a winding-up petition if it is satisfied that there is a bona fide and substantial dispute over the debt. This means that you will need to demonstrate that you have a genuine reason to dispute the debt claimed.
An application is made by submitting a form and supporting witness statement to the High Court. This witness statement should set out clearly the grounds on which the debt is disputed; exhibit evidence and contain a summary of the financial affairs of the company.
Please note the current restrictions in place on the presentation of winding-up petitions pursuant to the Corporate Insolvency and Governance Act 2020 –
Winding-up petitions cannot be presented on the basis of a statutory demand that was served between 1 March 2020 and 31 December 2020; and
Winding-up petitions cannot be presented between 1 March 2020 and 31 December 2020 based on the company’s inability to pay its debts, unless the petitioner has reasonable grounds for believing that COVID-19 has not had a financial effect on the company.
When faced with the threat of the presentation or advertisement of a winding-up petition, it is important to take legal advice early in order to take the most suitable course of action and comply with strict deadlines.
If you would like advice on the options available to you, please get in touch with Farleys’ insolvency team on 0333 331 4536.Request A Call Back