BHS have issued a winding-up petition against Retail Acquisitions Ltd (RAL) after being owed £6,177,000 . It was agreed that the loan would be repayable in instalments or sanctions would be issued. The Sanction was that if RAL failed to pay any instalments the whole sum, plus default interest, would become payable. Retail Acquisitions Ltd reportedly failed to pay a instalment of £100,000 on 21 July 2016. BHS have since issued a winding-up petition.
BHS is reportedly seeking to recover the money owed to them by RAL by way of set off clause. As a result of the set off cause being in the agreement BHS are entitled to recover the deposits paid on the loan if RAL miss a payment. RAL claimed that the set off clause was not binding however the Judge disagreed and said it was.
RAL claimed even if the clause was not binding they did still have a genuine claim against BHS for an amount that exceeded the amount they owed. The Judge acknowledged that this was a ground for striking out and dismissing a winding-up petition, however in the case RAL have against BHS, RAL had invoices to show what amount was owed to them. The invoices which RAL relied on had been issued to another company within the BHS group.
The Judge then had to decide on the issue whether RAL was insolvent. To do this, the Judge used the ‘balance sheet test’ which included looking at RAL’s total liabilities. This included the sum owed to Arcadia Group. The Judge ruled that RAL had no present income stream, and in addition; RAL were unable to provide sufficient evidence to substantiate the value of assets it claimed to have.
Winding-up Petition Solicitors
If you have received a winding up petition our legal experts are able to provide legal advice and representation. Our team of solicitors and barristers can obtain a court adjournment; CVA’s or successfully challenge the validity of the winding up Petition to ensure that the petition is dismissed, often without public advertisement.