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Opposing a Winding-Up Petition

Where the grounds to challenge the petition exist it would be sensible to oppose the winding up petition.  A winding up petition may be challenged by a company on the following grounds:

  1. The debt alleged in the demand to be owing is genuinely disputed on substantial grounds by the company.
  2. The company has a genuine right of set-off against the creditor which exceeds the amount claimed in the demand.
  3. In certain other limited circumstances (for example such as Jurisdiction, Company likely to become insolvent, Technical or procedural error or Delay).

The procedure to oppose a winding up petition is to file a witness statement in opposition in court not less than five business days before the date of the hearing of the petition (rule 4.18(1), Insolvency Rules). A copy of the evidence must also be sent to the petitioning creditor as soon as reasonably practicable (rule 4.18(2), Insolvency Rules).

The company is entitled to appear at the hearing of the petition and to oppose the making of a winding up order. It is usual for a company to instruct solicitors and/or counsel to appear on its behalf at the hearing.

If the company chooses not to instruct legal representatives, any director is entitled to appear at the hearing on the company’s behalf, but other agents (such as the company’s accountant) cannot.

Where a petition is opposed by the company on grounds which require the consideration of evidence (for example, where the company disputes the petition debt) the practice of the Registrars of the Companies Court at the Royal Courts of Justice is to adjourn the hearing to allow for the issue to be argued before the Registrar in Chambers.

Our team of expert Barristers & Solicitors is able to advise your company on opposing a winding-up petition. Contact us by clicking here or calling 0845 8622 529.

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