Sandstone Legal Limited Faces Administration Following Winding-Up Order

Sandstone Legal Limited, a Manchester-based claims firm specialising in housing disrepair, financial mis-selling, and dispute resolution, is on the brink of insolvency following a winding-up petition filed by trade creditor Medical-Legal Appointments Limited. This article examines the legal framework of winding-up petitions, the financial and operational consequences, and the broader implications for businesses facing insolvency.

A winding-up petition is a serious legal action that can have severe consequences for a company. It is a formal request to the court to liquidate a company that is unable to pay its debts. Understanding the process and acting swiftly is crucial to protecting your company’s interests.

Winding-Up Petition issued against Sandstone Legal Limited

Sandstone Legal Limited, operating under the brand Housing Claims Experts, has been a prominent player in housing disrepair claims against local authorities. The firm expanded its services to include debt recovery, car finance claims, and stamp duty land tax claims, with offices in Manchester, Liverpool, Lancaster, and Stockton-on-Tees.

However, recent financial challenges have culminated in a winding-up petition filed by Medical-Legal Appointments Limited on 24 December 2024.

Wining-Up Order Granted

The winding-up petition was issued as a result of the debtor’s unpaid debts, but the hearing was adjourned. ICC Judge Barber presided over the petition hearings, and following the proceedings on 31 January 2025, the case (CR-2025-000640) has now progressed to the administration stage, which indicates a focus on restructuring rather than outright liquidation.

Financial transparency remains a concern, as the company’s accounts for the year ending October 2022 are still overdue, leaving uncertainty surrounding its current liabilities.

Legal Framework for Winding-Up Petitions

Under the Insolvency Act 1986, a creditor owed at least £750 (s.123 IA) may petition the court to wind up a company if it fails to pay debts. The process involves:

1. Petition Filing: Creditor submits a petition to the High Court or relevant jurisdiction.
2. Court Hearing: The court assesses the petition’s validity and the company’s ability to repay debts.
3. Winding-Up Order: If granted, an official receiver or insolvency practitioner is appointed to liquidate assets and distribute funds to creditors.

Consequences of a Winding-Up Order

Once an official receiver is appointed, the company’s directors lose control over its affairs. Its bank accounts may also be frozen, effectively stopping business operations. The publication of the petition can severely impact the company’s reputation, discouraging investors, suppliers, and clients from engaging with it. If the petition succeeds, the company will face compulsory liquidation, leading to its dissolution and the sale of its assets to repay creditors.

Financial and Operational Impact

Reputational Damage: The winding-up petition’s advertisement in The Gazette could deter clients and investors.

Operational Disruption: Bank accounts may be frozen, slowing case progression and client communication.

Client and Staff Concerns: Many employees and clients reliant on ongoing claims face uncertainty.

Regulatory Scrutiny: The Solicitors Regulation Authority (SRA) is monitoring Sandstone to protect client interests.

Expert Legal Representation in Winding-Up Petition Defence

If your business is facing a winding-up petition, obtaining expert legal advice is crucial. Our team specialises in company law and insolvency proceedings, offering comprehensive legal assistance to businesses dealing with financial distress.

We have extensive experience in defending a winding-up petition often involves negotiating with creditors and seeking adjournments to allow time for a settlement. Injunctive relief can be pursued to prevent the petition from being advertised, helping to protect the company’s reputation. In some cases, a validation order may be obtained to unfreeze bank accounts, ensuring the business can continue trading. Engaging in negotiations with creditors is also crucial for resolving disputes and restructuring debt liabilities to secure the company’s future.

Winding-Up Petition London Solicitors

Our solicitors specialise in insolvency law, providing strategic legal guidance.

• Proven Track Record: We have successfully defended numerous companies against winding-up petitions.
• Tailored Legal Solutions: Our approach is bespoke, ensuring that each case is handled with the appropriate strategy.
• Transparent Communication: We provide clear and concise legal advice, keeping clients informed at every stage of the process.
• Efficiency: We understand the urgency of winding-up petitions and act swiftly to protect your business interests.
• Administration Support: We guide directors through filing for administration (under Insolvency Act 1986, Schedule B1) to restructure debts and retain control.
• Validation Orders: Unfreeze bank accounts within 48 hours to maintain cash flow and client services.
• Debt Restructuring: Renegotiate liabilities with suppliers, HMRC, and lenders to restore financial health.
• Regulatory Compliance: Work with the SRA or FCA to address concerns and safeguard your licence.

Protect Your Business with Expert Legal Support

Financial disputes and unpaid debts can pose significant risks to your company’s stability. If you are facing legal action over outstanding debts or require assistance with a winding-up petition, our team of specialist solicitors and barristers is here to help.

Contact us today for a confidential consultation and take proactive steps to safeguard your business from the risks of insolvency or call at 02071830529.