Letter Before Winding-Up Action

 

What is a Letter before Winding-up?

The court requires a creditor to behave reasonably before commencing winding-up proceedings and, in particular, to ideally write to the company with details of the debt and demanding payment. This can also be done on a Statutory Demand but care has to be taken in completing the same and ensuring the right demand notice and wording is notified and served correctly.

It is therefore wise to send a letter before winding-up action to the debtor company before commencing upon the path of a Winding-Up Petition. This can be sent on a solicitor’s letterhead or on a company letterhead. Sending it on a solicitor’s letterhead clearly makes it clear to the debtor company that legal action in the form of presentation of a petition is likely to shortly commence.

Our specialist solicitors & barristers can help by assessing your case prospects and whether a winding-up petition is the right tool. We have highly experienced dual-qualified lawyers, so if our view is your case has limited merit or high risk we can advise you of the best strategy in our first meeting.

Statutory Demand vs Non-statutory Letter of Demand

A non statutory letter of demand can be issued to a debtor company, warning that they will present a winding-up petition if the debt is not paid. This letter may be used as an alternative to a statutory demand under section 123(1)(a) of the Insolvency Act 1986 and is often preferred to avoid making an error in the statutory demand process and because formulaic stat demands are often ignored by debtor companies who receive many of these and do not take them as seriously as a letter before winding-up issued by a specialist winding-up solicitor’s firm.

What Details Need to be Included in a Pre-Winding Up Letter?

It’s not necessary for a pre-winding up letter to be in a specific format. But a pre-winding up letter that is effective will include the following on the letterhead of a specialist winding-up petition law firm:

  1. The precise name and address of the person or business that you are owed money from.
  2. Whether they operate as a limited corporation, limited liability partnership, or partnership.
  3. The amount of the outstanding debt.
  4. The amount of late payment compensation mandated by the Late Payment of Commercial Debts Regulations 2002, as amended by the Late Payment of Commercial Debts Regulations 2013, that you seek to assert.
  5. The overall balance owed.
  6. That the entire amount owed is overdue.
  7. If payment is not made by the mentioned date, a winding-up petition will be filed.

How Can We Help you Oppose a Winding Up Petition?

Our specialist winding-up petition lawyers are experts in defending winding-up petitions and setting aside statutory demands. We can advise you as to the specific merits and demerits of your case and can assist you in opposing winding up petitions and negotiating with creditors and obtaining a court validation order if required. If your company has been issued a winding-up petition or statutory demand, you may be able to challenge on the following example grounds:

  • That the debt alleged in the statutory demand or petition to be owing is genuinely disputed on substantial grounds by your company;
  • Your company has a genuine right of set-off against the creditor that exceeds the amount claimed in the statutory demand; or
  • In certain other limited circumstances (for example such as jurisdiction, technical or procedural error or delay).

To oppose a winding-up petition, you will initially need to file a witness statement in opposition with the Court within five business days before the date when the petition will be heard by the Court (rule 7.16 of the Insolvency (England and Wales) Rules 2016). A copy of that witness statement will need to be provided to the petitioning creditor at least five business days before the hearing.

Your company is entitled to appear at the petition hearing so as to oppose the making of a winding-up order. It is a routine matter for companies to instruct solicitors and/or barristers to appear on their behalf at the hearing.

If you would like a letter to be sent by our Winding-Up Solicitors to the company that owes you a debt over £750 then contact us by clicking here or calling 0845 8622 529

 

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Need a second opinion on your insolvency litigation? Our specialist solicitors & barristers can help by assessing your case prospects and whether a winding-up petition is the right tool. We have dual-qualified lawyers, so if our view is your case has limited merit or high risk we warn you in our first meeting.

Some firms offer free meetings with unqualified or junior lawyers but only after you’ve spent significant funds do you then get advice from a senior partner and/or barrister possibly suggesting that the case shouldn’t be pursued. We believe it is better to give accurate advice from experienced counsel from the outset.

We do things differently from all other law firms in England & Wales. We offer you partner and counsel-led advice in our first meeting, for a heavily discounted fixed fee. That way our best solicitors and barristers can review your litigation case and give you the correct advice at the outset, when it matters the most.

Legal advice is just one aspect of getting a solution. The most important thing is what you do with the legal knowledge about your case, how you present it to the other side and how you negotiate your way to the optimal legal settlement. Our lawyers are masters of strategically securing optimal financial settlement, often via winding-up petitions where carefully considered and advised as appropriate.

Want your case assessed or a second legal opinion? Call ☎ 02071830529 or message our London litigators by clicking the Check My Case button below:

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