Yes, it is possible to adjourn a winding-up petition, but it will depend on the specific circumstances of your case and the discretion of the court.
In general, a winding-up petition can be adjourned if the company is able to demonstrate that it has a viable plan to pay its debts and that the adjournment would be in the best interests of the company and its creditors.
If you are facing a winding-up petition and wish to seek an adjournment, it is advisable to seek legal advice from a solicitor experienced in insolvency law
Adjourning a winding-up petition
If you are facing a winding-up petition and have good reason for needing more time to prepare for the court hearing, you can apply to the court for an adjournment. An adjournment is a postponement of the hearing to a later date. The court will only grant an adjournment if it is satisfied that there is a good reason for needing more time, and that the adjournment would be in the best interests of the company and its creditors.
To apply for an adjournment of a winding-up petition, you will need to submit a request to the court. This should be done as soon as possible, as the court will generally only grant an adjournment if it is requested well in advance of the hearing date. In your request, you will need to explain why you need more time and how an adjournment would be in the best interests of the company and its creditors.
Stopping a winding-up petition before it’s advertised
Before the petition is advertised in the Gazette, there are several potential courses of action you can consider, such as
Pay your creditor in full
If you are struggling with debt repayment and your creditors have petitioned for the details to be made public, it is critical that you act quickly and pay off the debts in full including the costs associated with the petition. This should help prevent any unwanted publicity, but timing is of the essence to ensure this happens. Furthermore, it is also important to remember that repaying the debt in full will be of benefit to both sides in achieving a satisfactory outcome. If repaid swiftly, both creditors and yourself can put this matter behind you and move forward.
Enter company administration
Entering company administration can be a difficult time for both employers and employees, however, there are protocols in place to safeguard the future of the business. A moratorium is put into effect immediately upon entering administration and remains for eight weeks during which all ongoing legal action must cease. This provides those in control the breathing space they need to plan and make the best decisions possible regarding the future of the company. It is an important measure that allows insolvency practitioners to balance their obligations to creditors with their commitment to salvaging as much as possible of the business.
Enter into a Company Voluntary Arrangement (CVA)
Entering into a Company Voluntary Arrangement (CVA) makes it possible to manage your debt on one monthly repayment, providing the business is deemed viable by a licensed IP. This process allows you to remain in control of the company and trading with a view to resolving its financial difficulty. Under the CVA the liabilities are restructured in order to create an affordable disposable income for discharging debts over a period of time. Taking this approach reduces pressure from creditors, preserves jobs and gives your company an opportunity to remain solvent as long as its income stream does not fall below expectations.
Dispute the debt
Disputing the debt at court can be a valid option, but it is extremely important to have concrete evidence to back up your stance. Without this, you could find yourself in serious trouble, as you could be charged with deliberately misrepresenting the facts to the court. It is essential that any dispute of debt is handled carefully; doing your research and making sure all bases are covered will ensure the best outcome. Ultimately, it is up to you to decide if disputing the debt in court is necessary or advisable; however, always make sure that you don’t take unnecessary risks with your own credibility.
Stopping a winding-up petition after it’s been advertised
If the winding-up petition has already been advertised in the Gazette, your options for stopping or postponing the petition are more limited. If no action is taken, the petition will proceed to a hearing unless it is withdrawn by the petitioner or the company pays the debt in full.
If you believe that the debt listed in the winding-up petition is incorrect or that you have already paid it, you can dispute the debt. This involves presenting evidence to the court to support your claim that the debt is not valid or has been satisfied. If you are able to provide strong evidence to support your claim, the court may decide to dismiss the petition.
Another option that may be available to you is to enter into company administration. This involves appointing an administrator to manage the company’s affairs and try to resolve its financial difficulties. In some cases, it may be possible to negotiate a Company Voluntary Arrangement (CVA), which is a legally binding agreement between the company and its creditors to repay the debt over an extended period of time. However, a CVA requires the support of at least 75% of creditors (by debt value) in order to be approved.
Conclusion
To adjourn a winding-up petition, you will need to apply to the court for an adjournment. This involves submitting a request to the court explaining why you need more time and how an adjournment would be in the best interests of the company and its creditors. The court will only grant an adjournment if it is satisfied that there is a good reason for needing more time and that the adjournment would be appropriate in the circumstances.
In order to increase the chances of your application being granted, it is important to provide as much information as possible in your request. This should include details of any steps you have taken to address the debt and the reasons why you need more time. It may also be helpful to provide evidence of your efforts to resolve the debt, such as correspondence with creditors or evidence of attempts to negotiate a repayment plan.
It is advisable to seek professional advice if you are considering applying for an adjournment, our winding up petition adjournment team can help you to prepare your request and represent you in court.
Simply contact us on the above number or complete an online enquiry form.
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.