The following Restructuring & Insolvency guidance note Produced in partnership with Kate Rogers of St Philips Chambers provides comprehensive and up to date legal information covering:
It is a long-established principle that winding-up proceedings should not be commenced where the petition debt is genuinely disputed on substantial grounds. Further, it is an abuse of process to seek to use the winding-up court as a debt collection agency.
However, the line between what constitutes a 'genuine dispute', and the circumstances which allow the court to exercise its discretion under section 125 of the Insolvency Act 1986 (IA 1986) to allow the winding-up proceedings to continue, is not always clear. This Practice Note looks at some of the situations that can arise in relation to dispute petition debts and sets out some of the principles that can be drawn from case law.
This Practice Note covers the following:
the basic principles applicable to winding-up proceedings based on disputed debts
the effect that a counterclaim can have on winding-up proceedings
how the court will deal with winding-up proceedings where the debtor company is balance sheet solvent, but a debt is due
the circumstances in which the court will allow winding-up proceedings based on a substantial dispute to continue, and
the typical directions the court will make on disputed winding-up proceedings
There is long list of authorities stating that a winding-up order will not be made if the
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.