5.1 Compulsory liq Flashcards
In which court must a winding up petition be presented?
HighCourtforanycompany
High Court must be used if registered office is in London
Or if outside London, the County Court, provided both
share capital less than £120,000 and
registered office in bankruptcy district
What are the main grounds for court to wind up a company?
S122(1)(a) Company has passed special resolution to be wound up by court
S122(1)(f)&S123 It is unable to pay its debts as and when they fall due
S122(1)(g) Court of opinion it is just and equitable
S124A In the public interest
What is the s123 definition of unable to pay its debts?
Within 3 weeks company has not settled a statutory demand for a minimum of £750
Execution of judgement returned unsatisfied
Court satisfied company unable to pay debts as and when they fall due
Liabilities exceed assets (taking into account contingent and prospective liabilities)
How many days to comply with a stat demand?
21 days (to pay, secure or compound to creditor’s satisfaction)
Can a stat demand be set aside?
No process to set aside
Company would need to restrain creditor by injunction
How long before petition is verified by a statement of truth must it be made out?
No longer than 10 days earlier
What are the court fees to wind up a company?
Court fee: £302
OR Deposit: £2,600
Where is a petition served if no registered office?
Last principle place of business, failing which substituted service may be requested
What is the effect of a winding up petition?
Any other legal proceedings can be stayed, sisted or restrained
i.e. put on hold
Attachments obtained post-petition are void
Post-petition dispositions void
Petitions are advertised in the London Gazette
When is a company wu petition gazetted?
Not less than 7 days after service
Minimum of 7 days prior to hearing
Notice includes notice of requirement to give notice if wishing to appear at the hearing
What is the position if any other party wishes to appear at the hearing?
Creditors/ contributories wishing to appear must give notice to the petitioner
4pm on business day prior
Notice must state whether supporting or opposing
Details of debt or shares held
When can the petitioner be substituted?
An order for substitution may be made where the original petitioner:
Is found not to be entitled to petition
Has failed to give notice of the petition
Consents to withdraw, dismiss or adjourn the petition, or fails to appear
Appears but fails to seek an order
What can directors do if they wish to oppose a WU petition?
Injunction to restrain presentation of a petition Injunction to restrain advertising in the gazette
To oppose the petition, the company must serve notice of their intention to do so 5 BUSINESS DAYS before hearing
Who can apply for the appointment of a provisional liquidator?
Any party qualified to present petition for winding up
Notice to the company may be dispensed with where there is a serious risk to assets
Applicant must show sufficient grounds
Powers determined by Court and stated in the court order
To the exclusion of the directors
Where a Provisional liquidator has been appointed, to whom do they need to give notice/
Court notifies OR/ PL
AS SOON AS REASONABLY PRACTICAL after receipt of copy order of appointment, give notice of appointment unless court otherwise directs
Registrar of Companies
Company or any CVL Liquidator
Gazette plus further as thinks fit.
When can a statement of affairs be requested?
Once PL appointed, Official Receiver can request a Statement of Affairs
Who fixes the provisional liquidator’s remuneration?
The court
Remuneration and expenses paid
if company wound up, as expense of liquidation
if not wound up, out of company assets
PL may retain assets/ funds to pay remuneration and expenses if company not wound up
When is a PL’s appointment terminated
Dismissal of petition
WUO
Order by court to terminate/ remove
Application can be made to Court for removal by any party that could have applied for appointment
PL must give notice of termination ASARP to same parties notified of appointment and advertise in gazette
what are the consequences of WUO?
a copy of the order must FORTHWITH be forwarded to the registrar of companies (by OR)
no action or proceeding shall be proceeded with or commenced against the company or its property, except by leave of the court and subject to such terms as the court may impose
What date is the commencement of a compulsory WUO?
time of presentation of petition,
or date of winding up resolution (if resolution passed before the petition),
or date of winding up order (where court makes winding up order following presentation of petition for administration)
How long does the OR have to report to creditors?
No statutory time scale/ OR manual aims for within 8 weeks
In a Compulsory liquidation how long does a director have to produce an SA, if required
21 days (unlike 11 days else where)
Statement of concurrence
OR must inform director requested to produce SoA that relevant person asked to concur
The director preparing SoA must then copy it to concurring parties
Has 5 business days to deliver SoC from day on which receives SoA
What is the position re expenses to complete an SA in a Comp liq?
Person required to submit SoA or SoC can apply to OR for authority to get help to prepare
Estimate of costs must be provided
OR can impose conditions as to access to documents
Any allowance agreed by OR is an expense of liquidation
When can the OR apply for public examination?
OR may at any time before the dissolution of the company
They must do so if requested by
one-half, in value, of the company’s creditors; or
three -quarters, in value, of the company’s contributories
Who can take part and ask questions at a public examination?
the official receiver
the liquidator of the company
any person who has been appointed as special manager of the company’s property or business
any creditor of the company who has tendered a proof of debt
any contributory of the company
How long does the OR have to decide whether they intend to continue to act as liquidator?
12 weeks, with decision procedure within 4 MONTHS of appointment
What are the OR’s fees?
The Insolvency Proceedings (Fees) Order 2016, Schedule 1
OR’s administration fee:
Public Interest grounds £7,500
All other grounds £5,000
OR’s general fee £6,000
ie 13,500 PI winder, otherwise £11,000
OR’s fee for acting as liquidator: 15% of receipts
When can creditors requisition a meeting to appoint an alternative liquidator?
May be requisitioned by 25% of creditors in value
Where creditors requisition a decision, decisions of both creditors and contributories must be obtained
Requisitioning creditor is responsible for paying the expenses of obtaining the decision and must deposit funds with the official receiver
Decisions should be held WITHIN 3 MONTHS of the receipt of the request, or of the payment of the estimated costs, whichever is later
May be by Qualifying Decision Procedure or by Deemed Consent
How does appointment of replacement liquidator take effect?
Simple majority of votes required: 50%
Appointment takes effect when certified by the chair of the decision procedure
Annual reporting date will run to date of appointment of 1st liquidator i.e. the OR
When can the court appoint a liquidator?
Where a winding -up order is made immediately upon the appointment of an administrator ceasing to have effect or at a time where there is a supervisor of a CVA in office, the court may appoint that person as liquidator.
OR does not become liquidator
*Liquidator has responsibility for gazette and CH notifications
