“I dispute the amount being claimed in the Petition”

Disputing a Winding Up Petition

Disputing the amount claimed in a Winding Up Petition is very different from disputing a County Court Money Claim. The general assumption is that a company with an outstanding Winding Up Petition is insolvent so early action by directors is necessary to avoid the company’s bank account being frozen and other creditors joining the Petition. Failure to deal with a Petition WILL result in a Winding Up Order being made to close down the company.

Resolution before the Petition Hearing
Early contact with the Petitioning Creditor and their Solicitor to resolve the dispute can avoid the Petition being advertised in the London Gazette and thereby reduce the prospect of the bank and other creditors learning about it.

Grounds for disputing a Petition might be administrative or oversight. Certainly a lot of petitions submitted by HMRC are disputed due to non-filing or missing VAT and PAYE returns. If these can be brought up to date along with any due payments then HMRC will have no grounds for demanding the company be wound up.

If the amount is disputed and agreement cannot be reached then the company can apply for an injunction to prevent the Petitioning Creditor from advertising the Petition.

Resolution in Court
If the amount is still disputed when the Petition is heard, the Registrar will issue directions which effectively suspends the Petition until the arguments can be laid before the Court and judgement made to resolve the dispute. Directions by the Court normally involve requiring a written defence to be filed with the Court within 28 days, then a written response to the defence must filed by the Petitioning Creditor within 28 days, then the Court will allow a further 14 days for the arguments to be considered by the Registrar who will either issue judgement or set a trial date to be heard in chambers.

Only after judgement has been given can the Petition be relisted for either dismissal or to make a Winding Up Order.

Call K2 if you need help to run your company while a Petition is disputed

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