Winding-Up Petition: I want to pay but my company doesn’t have sufficient funds

winding-up petition Sep 29, 2019

If you've received a Winding-Up Petition and you want to pay but your company doesn’t have sufficient funds here are the possible outcomes:

Deferred Payments

While the Court will normally adjourn a Petition Hearing to allow for time to make the payment, too many directors run out of time if they need to collect in outstanding debts, sell assets or raise funds.

There are fundamentally only two options for deferring payments when a company doesn’t have sufficient funds:

  • Petitioning Creditor Payment Plan; or
  • Company Voluntary Arrangement

Petitioning Creditor Payment Plan

This involves reaching agreement over payment terms that provide sufficient reassurance for the Petitioning Creditor to support a dismissal of the Winding Up Petition. Such an agreement will not bind other creditors who might want to take over the Petition but if it is agreed before advertising the Petition it can be achieved.

However, HMRC does not agree such plans so this option is not available if they...

Continue Reading...

Are creditors and their lawyers using Winding-Up Petitions for debt collection?

I have written previously about short term thinking by businesses and the effect it has been having on their ability to plan ahead for the medium and longer term.

It has been affecting businesses’ ability to invest in capacity, efficiency and R & D as planning for growth. Instead, most SMEs seem to be focused on cash flow and immediate profits, in that order.

In the current uncertain economic climate short term thinking may seem to be a rational response by creditors seeking payment.

However, there is another, perhaps more worrying trend that I am seeing among creditors, many of them suppliers to SMEs. Larger companies owed money and their solicitor advisers are often pursuing debts by early use of a winding-up petition instead of speaking with their SME clients and if necessary helping them. Unlike most reporting which is about large companies delaying payments to SMEs, I am focusing on large companies’ aggressive debt collection from SMEs.

Sometimes it is necessary...

Continue Reading...
Close

50% Complete

Two Step

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.