T: 03333 21 9000 E: advice@bishopfleming.co.uk Log In

Winding up petitions

I have discovered that my customer has received a winding-up petition. What should I do next?

A Winding Up Petition is the most serious form of action a creditor can take against a company, and will result in the company entering compulsory liquidation on the basis that it is unable to meet its liabilities as and when they fall due, unless the Petition is successfully contested or otherwise dealt with prior to the making of the Order.

The process involves the appointment of a Liquidator who has considerable powers to investigate the company’s affairs and the reasons for its failure, and realise the company’s assets for the benefit of creditors. Initially, the Official Receiver is tasked with overseeing the liquidation, but if circumstances permit an independent third party Liquidator is then appointed, generally by the Secretary of State or, less frequently, by the company’s creditors.

The loss of a customer will not only result in bad debt; if they are a significant customer you have the problem of replacing those lost sales. There might also be an adverse effect on your margins and profits and you might need to reshape your own business as a result.

What you need to do

Taking control of a liquidation

Compulsory liquidation is generally considered the last resort because all other options have already been exhausted, so once the Order is granted the compulsory liquidation process is established and matters are, in the main, taken out of your hands.

However, it is important to remember that you can proactively take control of the situation and participate in the process by providing important information to the Liquidator, and helping to influence decisions that are made in a way that maximises your prospects of recovery. As a creditor, you are also entitled to make representations to the Official Receiver if you wish for a particular Liquidator to be appointed.

How we can help

On many occasions insolvency proceedings are initiated and enforced without the debtor being proactive about their predicament, and before they have taken insolvency advice. That is not something you can enforce as the third party creditor, but what we can do on your behalf is approach your customer to establish if alternative options, such as a Company Voluntary Arrangement, are viable which may then give rise to a better recovery to creditors and the possibility of ongoing trade.

There is a very narrow window of opportunity between the advertising of the petition and the making of the Order and therefore the sooner you contact us the better are the prospects of a successful outcome.

Call us as soon as you can

Once you have discovered that your customer has received a Winding Up Petition or has otherwise entered compulsory liquidation, contact a member of our team who will be able to assist by:

  • Confirming the status of your customer;
  • Explaining how the liquidation process works;
  • Filing a proof of debt form on your behalf and, where a creditors’ meeting has been convened, a proxy form;
  • Discussing with you any concerns that you may have and suggesting matters that require investigation, which can then be brought to the attention of the Liquidator;
  • Assisting you with a completion of a retention of title claim against the company, where applicable, which may help you to recover part or all of your unpaid debt

Get in touch

Get in touch today to arrange your free initial consultation.

Your Creditor Services Team

Creditor Services News

My Employer is insolvent – what are my rights?

If your employer is unable to pay its debts, including your wages, it is likely to be insolvent. Your options depend on whether your company has entered a formal insolvency procedure. Sam Hawkins explains. This advice assumes that they have, but if not you should contact Citizens Advice or ACAS in the first instance for […]

Read More

Statutory Interest on Tax Liabilities in Solvent Liquidations (MVL)

HM Revenue & Customs (HMRC) now require statutory interest on corporation tax (CT) where it is paid after the normal due date, which has significant implications for current and future Members’ Voluntary Liquidations (MVLs). HMRC require the payment of statutory interest at 8% from the commencement of a liquidation on any CT that falls due […]

Read More

Other Services