When is presentation of a winding-up petition an abuse of process? (Coilcolor Ltd v Camtrex Ltd)

When is presentation of a winding-up petition an abuse of process? (Coilcolor Ltd v Camtrex Ltd)

David Alexander QC andMatthew Abraham at South Square examine the court’s decision in Coilcolor Ltd v Camtrex Ltd which involved an application to restrain the presentation of a winding-up petition.

Original news

Coilcolor Ltd v Camtrex Ltd [2015] EWHC 3202 (Ch), [2015] All ER (D) 90 (Nov)

The Companies Court allowed the applicant company’s application to restrain the presentation of a winding-up petition made against it. In the circumstances, the inquiries of fact andcontext required would be far better dealt with by the ordinary process. A petition for winding-up was not a suitable or even proper way to proceed.

What was the background to the case, briefly?

The applicant is a purchaser of steel coils. The applicant processes the coils supplied before on sale for use in a variety of applications. The applicant primarily sources its materials from companies based in China andWestern Europe. However, due to lead times that arise in relation to orders from abroad, the applicant sometimes spot buys from stockholders in the UK, such as the respondent, to make up any supply shortfall.

The case involved the purchase of steel coils by the applicant that were invoiced over May andJune 2015 by the respondent. The applicant asserted that there were defects in relation to the coils supplied andas a result did not make payments in relation to certain invoices over those months. The respondent demanded the balance due on the ground that there were no such defects.

Following the applicant’s refusal to make payment until a proper resolution of the defects, the respondent threatened to present a winding-up petition against the applicant in relation to the disputed sums. As a result of the threat to present a winding-up petition the applicant sought an injunction from the court to restrain the respondent from doing so.

What were the legal issues the

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.