Q&As

Can a creditor currently present a winding up petition based on an unsatisfied statutory demand in the light of Schedule 10 to the Corporate Insolvency and Governance Act 2020? If a statutory demand can be served, can the alleged debtor seek an injunction?

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Published on LexisPSL on 26/05/2021

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

  • Can a creditor currently present a winding up petition based on an unsatisfied statutory demand in the light of Schedule 10 to the Corporate Insolvency and Governance Act 2020? If a statutory demand can be served, can the alleged debtor seek an injunction?

Can a creditor currently present a winding up petition based on an unsatisfied statutory demand in the light of Schedule 10 to the Corporate Insolvency and Governance Act 2020? If a statutory demand can be served, can the alleged debtor seek an injunction?

Paragraph 1 of Schedule 10 to the Corporate Insolvency and Governance Act 2020 (CIGA 2020) (as amended) provides that no statutory demand served between 1 March 2020 and 30 June 2021 can provide the basis of a winding up petition presented against either a registered or unregistered company on or after 27 April 2020. There is nothing in CIGA 2020 to prevent a statutory demand being served, but it cannot be used to found a winding up petition. However, an unsatisfied statutory demand does not provide the only gateway to the presentation of a winding up petition—a creditor can petition to wind up a company if the creditor can show that the debtor company is insolvent on either a cash-flow or balance sheet basis (Insolvency Act 1986 (IA 1986), ss 123(1)(e) and 123(2) respectively), or where the creditor has the benefit of an unsatisfied execution of a judgment.

CIGA 2020 does not prevent a creditor presenting a winding up petition on any of these grounds, but does create a new, additional condition: the creditor must, in general terms, additionally be able to demonstrate

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