How To Stop a Winding Up Petition

There are a number of procedures to stopping a winding up petition once it has been issued. You can of course defend it if you feel you have ground to do so, but I will tell you from my personal experience that the winding up petitions are only issued as a last resort if all else has failed for the creditor who is trying to get their money from your company.

 You can of course pay the amount on the winding up petition that is one way of avoiding the petition.

 Other ways which we have used may a times as indicated in this short case study below.

 Case study of company “G” 

Company “G” a health & vitamins business online sales of £1.6m had run into financial difficulties with loss of orders and declining sale due the competition. They also lost 2 key staff members which did not help matters. With debts in access of £300,000 plus and increasing daily the bulk of the debt was Inland Revenue for PAYE and VAT. So it was only a question of time before some one set the ball rolling to wind the company up. HMRC were the first to issue a winding up petition jointly for PAYE & VAT the petition was for £176,000.00  

The directors after a week of trying to talk to HMRC , banks, solicitors and the company’s accountants they were no where near to the solution than they were before the winding up petition.  One good thing that did come out of their meetings with the company accountants was they were given our contact details to see what if anything we could do to help them.

 We were called in to see if we could see a way forward for the company and see what could be done about the winding up petition. After 2 days analysing the company’s books and records, we were able to identify a major asset that the company was unaware which it had. The asset was the customer database of over 500,000 customers who had made a purchase but only 10% were coming back for repeat orders. The company had been spending a fortune paying Google for pay per click for new customers and not doing anything with customers which they already had.

 Along with our legal team and an insolvency practitioner who was willing to work along side the company with a view of differing some of the Insolvency Practitioners fees and also we were happy to differ our fees subject to the proposal.

 We got the courts and the creditors to agree to place the company in to administration so that we could restructure the company and save jobs and return a higher dividend to the creditors via our route than the compulsory winding up procedure.

 A new company was set up to run the ongoing sales and also a new structure was placed. Priority was to churn as many of the company’s old customers rather than finding more new customers. We assisted in producing a 30 page catalogue with the fast moving lines and posted to the existing customer base within 3 months the company was able to see how much cheaper it was to sell to customers that had already purchased rather than finding new customers.

 Company “G” was liquidated after the administration had run its course and the creditors were paid out £0.45p in every pound owed.

 Further Support

 You should make use of this time to seek professional advice on the options open to you and your company, you can call the business helpline on 0800 24 0800 for free and confidential advice before it’s to late.