It has been widely reported that Pizza Express, the pizza dining chain that employs 14,000 people in the UK, has a reported debt pile of £1.1 billion. Pizza Express has denied that it plans to close around 150 restaurants; however financial advisers have been appointed to prepare for debt talks of the first repayment of around £465 million to bondholders in 2021.
The threat of insolvency for any business is a severe one and the consequences for any company upon presentation of a winding up petition can potentially be extremely serious and will signal the beginning of the end for a company. Our team of Insolvency expert lawyers have years of experience and can offer solutions to any related problem or question that you may have.
Why is Pizza Express in trouble?
The restaurant chain, founded in 1965, has reportedly faced an 11% fall of pre-tax profit in the second quarter leading to a rises in its mountain of debt. The company has hired financial advisers to try to mitigate the threat of insolvency however the business is running out of time to shed the debt.
Pizza Express has been in the red for the previous 2 years with a loss of £55 million in the last year alone. Further to this, the restaurant chain is paying £93 million annually due to the interest on its debts with many suspecting that debt restructuring is inevitable for the company.
Will Pizza Express become insolvent?
Pizza Express has until 2021 to pay its outside creditors which amounts to around £600 million; the rest of the £1.1bn is a loan from its Chinese partners. This suggests that with possible financial advice and debt restructuring that the company is not in imminent danger.
The business is, however, supposedly making a reasonable amount of cash which has allowed auditors to decide the chain is in fact viable.
Why has Pizza Express struggled?
A wide variety of reasons are thought to have affected Pizza Express’s profit margins the most basic of these being the rising rents, minimum wage and produce price all while the fall of consumers inclined to eat out, essentially causing turnover to fall. Although Pizza Express could raise prices it creates a risk of losing customers due to being too pricey.
Other reasons that have been suspected as causes of the company’s declining profit margins are that there is a lot of similar competition with many wanting customers choosing to go to independent restaurants for a dining experience rather than a chain.
The rise in companies such as Uber Eats and Deliveroo are also thought to have impacted Pizza Express due to the lack of incentives to spend more on things such as dessert and drinks that they would have been more inclined to purchase in the restaurant.
Do you need help solving a company debt problem?
Our team made up of lawyers and barristers can assist by providing you with a bespoke solution whether you are owed money and thinking of issuing a petition or are a company facing a winding-up petition. We even assist other general practice lawyers with clients facing winding up petitions. We can guide you through the minefield of complex winding-up rules, littered with potentially costly compliance traps. Our team has experience in negotiating with debtor companies and their Solicitors as well as petitioners (in particular HMRC).
We know exactly how to get the best results for you. The team include qualified Solicitors and Barristers whom have in-depth experience of insolvency and debt laws and first hand commercial, litigation and advocacy experience.
We have a team of established lawyers with a proven track record of delivering solutions.
How can a company (like Pizza Express) oppose 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:
- The debt alleged in the demand to be owing is genuinely disputed on substantial grounds by the company.
- The company has a genuine right of set-off against the creditor which exceeds the amount claimed in the demand.
- 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.
How we can help you:
As a leading law firm with a track record of success, you can be assured your matter is in safe hands. Our success rate is a result of the dedication of our lawyers whom will diligently review your matter so it has the best possible chance of success from the outset when it matters the most.
What we can do for you:
We have a strict procedure in place to ensure every matter undergoes a thorough initial assessment. Typically we do the following:
- Assess the risks/merits of a petition
- Gather all relevant documents needed
- Complete all paperwork
- Negotiate and correspond with your opponent
- Manage the entire petition process
- Go on the record and represent you at the Companies Court
Our team of Winding-Up Petition expert lawyers have years of experience and can offer solutions to any related problem or question that you may have.
Unlike many other specialist insolvency law firms, members of our team are experienced litigators with professional negligence experience and in particular when it comes to claims for negligent insolvency advice which can be from either an insolvency practitioner, solicitor or barrister.
Instruct Specialist Insolvency 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 Inns 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