Case Study: Ex Parte Injunction to restrain Winding-Up Petition Dismissed

We successfully represented a lender client involved in insolvency litigation where the other side, without notice, obtained an injunction to prevent our client advertising a winding-up petition arguing that there was an agreement in respect of the debt. This debtor argument passed a scratch and sniff test before a busy Deputy ICC Judge but on real analysis and legal representations by our seasoned legal team was doomed to failure. Our fast-thinking solicitor and barrister team turned the entire situation completely around within 7 days on the basis of legal arguments (centred on nudum pactum and consensus ad idem) and had the injunction dismissed and forced the borrower (via legal arguments on res judicata and abuse of process) to pay their debt promptly and also pay our client’s legal costs on the indemnity basis.

These stellar results are typical of our elite legal team and demonstrate how experienced legal strategy in the hands of the right legal practitioners can swiftly overcome seemingly sound debtor delay tactics. This case showcases our expertise in challenging improper interim injunctions and securing full recovery for creditors facing well-resourced attempts to abuse the insolvency process.

Our client successfully and quickly recovered £400,000 plus costs, after we defeated an interim injunction that was intended to restrain the advertisement of their winding-up petition. The case exemplifies how comprehensive evidence gathering, rigorous procedural challenges, and strategic litigation can secure full debt recovery.

Background: Debt Default Leading to a Winding-Up Petition

Our client was owed over £400,000 by a debtor company under a loan facility agreement originally dated 13 October 2022. The facility commenced with an initial advance of £500,000 at 4.5% per month, with subsequent variations on 7 June 2023 extending the term and providing a further £250,000 advance, and on 3 August 2023 providing an additional £130,000 advance. All debts became repayable by 16 December 2023 at a reduced rate of 2.25% per month.

Despite extensive forbearance over 19 months following default, a significant balance remained outstanding. The debtor’s own filed accounts at Companies House showed net liabilities of £714,430 and negative cash of £517,749, demonstrating clear insolvency. Following service of a statutory demand on 10 June 2025, a winding up petition was presented on 9 July 2025.

How Did the Debtor Attempt to Frustrate the Winding-Up Petition Process?

On 17 July 2025, the debtor applied for and obtained an interim injunction without notice to restrain advertisement of the winding up petition. This tactical manoeuvre was particularly cynical as the application was made before the statutory seven-business-day period for advertisement had even expired. Despite having four days between application and hearing, no notice was given to our client, and no skeleton argument was prepared for the ex parte hearing.

The debtor’s case relied primarily on an alleged settlement agreement reached during a telephone conversation. However, examination of the evidence revealed fundamental flaws in this assertion. The debtor had unlawfully and secretly recorded the telephone call, producing only a partisan transcript rather than the actual recording despite repeated requests for the full audio.

How Our Firm Can Assist

We act for both creditors seeking to issue winding-up petitions and companies defending against them. Our insolvency solicitors have a proven track record of achieving swift, cost-effective resolutions in high-pressure situations. Whether you need decisive action to recover debts or robust defence to protect your business, we provide clear, commercially focused advice tailored to your circumstances.

Why Did the Alleged Settlement Agreement Fail to Stop the Winding-Up Petition?

Even the debtor’s own transcript revealed disagreement on crucial terms, with clear evidence that no meeting of minds had been achieved. The conversation clearly contemplated a subsequent written agreement, with repeated references to putting matters “in writing so neither of us gets it wrong.” The debtor’s transcript contained additions in square brackets attempting to rewrite the conversation, including inserting words like “settlement” that were never spoken.

WhatsApp evidence spanning 2024-2025 demonstrated a consistent pattern where the debtor would characterise discussions as agreements when convenient, only to be corrected. Notable examples included false claims of agreement for reduced debt payments and security releases, consistently rebutted by the creditor’s insistence that proposals be made in writing. This pattern evidence proved crucial in establishing that no genuine agreement existed.

How Did We Successfully Challenge the Interim Injunction in the Winding-Up Petition?

Upon learning of the interim injunction, we immediately prepared for the inter partes hearing on 31 July 2025. Our strategy focused on demonstrating that even accepting the debtor’s version of events, it still owed over £150,000, far exceeding the £750 threshold for winding up proceedings. We presented compelling evidence of the debtor’s clear insolvency from its own filed accounts at Companies House, which showed substantial net liabilities and a negative cash position.

We highlighted significant procedural improprieties in the debtor’s application, including the lack of genuine urgency given the application was made before the advertisement period had expired, inadequate disclosure requirements for ex parte applications, and the absence of a skeleton argument despite having four days’ preparation time.

What Was the Court’s Decision on the Interim Injunction Application?

The court vacated the interim injunction in its entirety, restoring our client’s right to advertise the petition. The judgment recognised that no genuine or substantial dispute existed regarding the debt, that the debtor’s insolvency was evident from its own filed accounts at Companies House, and that the procedural defects in obtaining the injunction were significant.

Immediate Settlement: The Power of Commercial Pressure in Winding-Up Proceedings

Immediately following the court hearing, representatives of the debtor company approached us seeking settlement. The reality of facing compulsory liquidation and public advertisement had concentrated their minds significantly. The debtor offered full payment of the petition debt of over £400,000 plus complete reimbursement of legal costs for both proceedings, totalling approximately £60,000.

Why Choose Us for Your Winding-Up Petition Matter

We have extensive experience acting on urgent winding-up matters, whether issuing petitions to recover debts or defending companies from insolvency proceedings. Our approach combines legal precision with commercial strategy, ensuring our clients’ objectives are met while minimising risk. If you are facing or considering a winding-up petition, we can act swiftly to protect your interests and secure the best possible outcome.

How Did Our Strategic Response Secure Full Debt Recovery in the Winding-Up Petition?

The debtor’s failed strategy revealed several critical errors. The timing of their injunction application before the seven-day period expired undermined claims of urgency. Their reliance on secretly recorded calls without providing actual recordings raised serious credibility issues. The inconsistent position evidenced by their own transcript contradicted their case on key terms, while false insertions to the transcript through square-bracketed additions revealed manipulation of evidence.

Our effective response demonstrated the power of comprehensive evidence gathering, including the debtor’s own filed accounts proving insolvency, procedural challenges to improper ex parte applications, emphasis on commercial reality showing substantial undisputed debt remained even on the debtor’s best case, and pattern evidence from WhatsApp messages showing consistent correction of false claims.

Resolution: Clean Exit Through Consent Order in the Winding-Up Petition

Following negotiations, the parties entered into a short-term settlement agreement on 8 August 2025. The debtor immediately made an initial payment of £200,000, demonstrating good faith and triggering the agreed settlement terms. A consent order was filed with the court to formalise the resolution. Under the agreement, a further payment of £275,000 is due by 15 December 2025, though an early settlement discount is available if £260,000 is paid by 14 November 2025. This structured approach has delivered clean resolution and full debt recovery for our client.

What Strategic Lessons Does This Winding-Up Petition Case Provide?

For creditors facing similar tactical challenges, this case emphasises maintaining detailed records of all communications, preparing immediately for inter partes hearings when facing tactical injunctions, deploying multiple arguments including minimum debt calculations and insolvency evidence, challenging improper ex parte applications rigorously, and gathering pattern evidence showing the debtor’s approach to characterising discussions as agreements.

For debtors, the case demonstrates that courts require genuine, substantial disputes rather than tactical delays, that ex parte applications demand complete candour and proper urgency, that unsuccessful tactical applications carry significant costs exposure, that advertisement threats remain highly effective settlement tools, and that secret recordings without disclosure raise serious credibility issues.

Facing a Winding-Up Petition or Looking to Issue One? Need Immediate Legal Advice?

Whether your company is defending against a winding-up petition or seeking to issue one against a debtor, swift and decisive legal action is essential. If your business has received a statutory demand or petition, there may be grounds to challenge it. Conversely, if you are a creditor owed a significant debt, a winding-up petition can be one of the most powerful tools to compel payment. In urgent cases, our team can also advise on obtaining or resisting injunctions to restrain the presentation or advertisement of a winding-up petition.

Proven Track Record in Issuing and Defending Winding-Up Petitions

As a leading London law firm specialising in insolvency disputes, we have acted for both creditors and debtor companies in high-value, complex winding-up matters. Our lawyers assess each case meticulously from the outset, identifying the most effective legal strategy to protect or advance your position and ensuring the best possible chance of success when timing is critical.

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Specialist London Winding-Up Petition Lawyers

We are a City of London law firm comprising experienced Solicitors and Barristers with a proven track record in insolvency litigation. Based in the Middle Temple Inns of Court, next to the Royal Courts of Justice, we regularly act in the High Court (Rolls Building), High Court District Registries, and County Courts with insolvency jurisdiction under the Insolvency Rules. Our expertise spans from aggressively pursuing unpaid debts through winding-up petitions to robustly defending companies from insolvency proceedings.

Why Instruct Us?

Our insolvency team has unparalleled experience in both issuing and defending winding-up petitions, statutory demands, and related applications. We act quickly, strategically, and decisively, often achieving results without the need for prolonged litigation. Fill our online form or call our specialist team today on 0207 183 0529.