Winding-up Petition Forces Electric Van Company to Pay Invoice

Electric van manufacturer Arrival is facing legal action over unpaid bills, according to recent reports. The company, which has been hailed as a champion of British electric vehicle production, is said to owe money to a number of suppliers, some of whom are now considering legal action. One supplier, Fast Components, has already issued a winding-up petition against Arrival in an attempt to recover unpaid bills.

Need a second opinion on your insolvency litigation? Our specialist solicitors & barristers can help by assessing your case prospects and whether a winding-up petition is the right tool. We have highly experienced dual-qualified lawyers, so if our view is your case has limited merit or high risk we can advise you of the best strategy in our first meeting.

Arrival Electric Van Company Forced to Pay Invoice Due to Winding-up Petition

A winding-up petition is a legal tool that can be used to force a company into liquidation if it cannot pay its debts. If the court grants the petition, the company’s assets are sold off and the proceeds are used to pay its creditors. In the case of Arrival, the company has been given until March 18th to pay the invoice or face a winding-up order.

If Arrival fails to pay its bills on time, it could face legal action for breach of contract. Under UK law, a contract is formed when one party makes an offer to another party, who then accepts that offer. The terms of the contract will then be legally binding on both parties. If either party fails to comply with the terms of the contract, the other party may have the right to bring legal action to enforce the terms or seek damages.

In the case of Arrival, its suppliers may argue that the company breached its contract by failing to pay its bills on time. Depending on the terms of the contract, the suppliers may be entitled to sue Arrival for breach of contract, seek damages, or terminate the contract altogether.

If Arrival is found to have breached its contracts, it could face significant legal and financial consequences. The company may be required to pay damages to its suppliers, which could be substantial if the suppliers have suffered losses as a result of Arrival’s failure to pay its bills. In addition, the company’s reputation could be damaged, and it may find it more difficult to secure contracts with suppliers in the future.

The Importance of Paying Bills on Time

Paying bills on time is critical for businesses of all sizes. Failure to pay bills can lead to legal action and reputational damage, which can affect a company’s ability to secure contracts and funding. Late payments can also strain relationships with suppliers, potentially leading to disrupted supply chains and higher costs.

To avoid these consequences, businesses should prioritize paying bills on time and ensure that they have sufficient cash flow to meet their financial obligations. This may require implementing financial management systems, such as invoicing and payment tracking tools, and negotiating payment terms with suppliers.

Forcing Debtors to Pay Using a Petition

A winding-up petition is a powerful legal tool that creditors can use to force a debtor to pay their bills. However, it is important for creditors to use the petition responsibly, as it can have serious consequences for the debtor and its employees.

Before issuing a winding-up petition, creditors should first try to negotiate with the debtor to reach a payment agreement. If this fails, they can issue a statutory demand, which gives the debtor 21 days to pay the debt or face a winding-up petition. Creditors should only issue a winding-up petition as a last resort, and only if they believe that the debtor is insolvent and unable to pay its debts.

For debtors, receiving a winding-up petition can be a daunting experience. It is important for them to seek legal advice as soon as possible, as they may be able to challenge the petition or negotiate a payment plan with the creditor.

Arrival’s failure to pay its bills on time has resulted in a winding-up petition being issued against the company. This serves as a reminder to companies to ensure that they have robust financial management systems in place to avoid such disputes and maintain good relationships with their suppliers. Creditors should use winding-up petitions responsibly and only as a last resort, and debtors should seek legal advice if they receive a petition.

How Can We Help you Oppose a Winding Up Petition?

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.