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Extension To Restrictions On Winding Up Petitions

Restrictions were implemented preventing the issuance and presentation of winding up petitions from 1 March 2020.

UK Government have announced that the restrictions, otherwise due to expire at the end of December 2020 have been extended further, until 31 March 2021 (the Relevant Period).

It is therefore now prohibited to present a winding up petition against a company debtor between 27 April 2020 and 31 March 2021 if the petition is based on a statutory demand served between 1 March 2020 and 31 March 2021.

It is also prohibited to present a winding up petition on the grounds of a company’s inability to pay its debts unless there are reasonable grounds for believing that Covid-19 has had no effect on the solvency of the company or that the debt issues would have arisen anyway (the ‘Coronavirus Test’). The Court cannot make a winding- up order on a petition that fails the Coronavirus Test.

Although Winding Up petitions currently face the above challenges, there are alternatives. Claims seeking the recovery of money remain possible and the courts have not been closed at any time to these types of claims. This is considered a fundamental right enabling access to justice. Therefore although seeking a winding up of a debtor company may not be permitted, issuing a claim for money judgment may present a useful alternative. If you would like to discuss your circumstances further don’t hesitate to contact a member of our team.

We will continue to provide updates as the position develops.

Team at Helix Law

LinkedIn: https://www.linkedin.com/company/helixlaw
Email: [email protected]

Posted by:

Alex Cook
Solicitor

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