Renowned online fashion retailer Missguided has recently found itself close to collapse after it was found unable to honour payments to its suppliers. Despite being acquired in a rescue deal, it still faces being caught up in insolvency by way of a winding-up petition.
We are leading experts specialising in insolvency proceedings. Our experienced City of London solicitors and barristers regularly assist companies facing a winding up petition; individuals who have been served a statutory demand; or creditors owed money and considering issuing a winding up petition.
Why was Missguided unable to pay its debts?
Faced with inflation, rising competition, poor business management, and disruptions in their supply chain, Missguided has found itself unable to operate sustainably. Missguided’s suppliers, left millions of pounds out of their pockets, have initiated a winding-up petition, in a bid to recover debt owed to them. The court is due to rule on the matter next month in July.
What will happen to Missguided?
After being bought in a rescue deal by Sports Direct owner Frasers Group, Missguided no longer faces the danger of imminent collapse. It is reported that 87 staff members have been made redundant whereas 147 are expected to move to the parent company, Frasers. The company’s near-collapse is currently being overseen by an administrator, after which management will be handed to Frasers.
What does a winding up petition do?
Missguided is one of many cases where creditors seek to enforce their debt. While not every case of debt may run into the millions, a winding-up petition is often the last recourse for a creditor. This means that it is a serious matter that threatens the existence of the debtor company.
After the issuance of the requisite winding-up application before the court as well as service upon the debtor company, the court may order compulsory liquidation of the company’s assets (Section 123(1)(a), Insolvency Act 1986). This allows a creditor to recover an amount equivalent to the sum owed to them at risk of the debtor company’s existence.
Our specialist winding-up petition lawyers are experts in defending winding-up petitions. 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.
If your company has been issued a winding-up petition or statutory demand, you may be able to challenge that petition on the following 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.
Instruct Specialist Winding Up Lawyers
We provide a no cost initial case review to establish whether or not we can help you. We are a specialist City of London law firm made up of Solicitors & Barristers and based in the Middle Temple Inn of Court adjacent to the Royal Courts of Justice. We are experts in dealing with matters surrounding insolvency in particular issues. Our team have unparalleled experience at serving statutory demands, negotiating with debtors/creditors, setting aside statutory demands and both issuing and defending winding up petitions vigorously at the Royal Courts of Justice (Rolls Building), or the relevant High Court District Registry or County Court with jurisdiction under the Insolvency Rules.