Q&As

A company subject to a winding-up petition settles the petition debt prior to advertisement and agrees with the petitioning creditor that an order will be sought at the hearing dismissing the petition. Notwithstanding non-advertisement of the petition, if a third party creditor indicates its intention to take over the petition at the hearing, what is likely to happen at the hearing?

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Published on LexisPSL on 02/06/2017

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • A company subject to a winding-up petition settles the petition debt prior to advertisement and agrees with the petitioning creditor that an order will be sought at the hearing dismissing the petition. Notwithstanding non-advertisement of the petition, if a third party creditor indicates its intention to take over the petition at the hearing, what is likely to happen at the hearing?

For the purposes of this Q&A, we assume that the winding-up petition is being conducted under the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 that came into force on 6 April 2017.

Where a winding-up petition is presented against a company, it is of course possible for the debtor company and the petitioning creditor to reach a settlement agreement (usually on the terms mentioned in your query) which means that the petitioning creditor will not seek a winding-up order.

If the winding-up petition has not been advertised in accordance with IR 2016, SI 2016/1024, r 7.10 and no notices in support or in opposition to the winding-up petition have been received by the petitioning creditor, then the court’s permission can be sought under IR 2016, SI 2016/1024, r 7.13 for the petitioning creditor to withdraw the winding-up petition (so long as the debtor company consents)—where permission is granted, it allows for the winding-up petition to be withdrawn prior to the hearing listed to hear the winding-up petition.

However, if all of the conditions set out in IR 2016, SI 2016/1024, r 7.13 are not met (and in your case it appears that they are not), then the only option is for the petitioning creditor to atten

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