How to Appeal a Compulsory Liquidation

If your company is facing compulsory liquidation, you may be wondering whether there is a way that you can appeal this process.

If you’ve received a winding-up order or petition as part of a liquidation process, the options available to you to stop or appeal this will depend on how quickly you take action after receiving the petition. 

You can take a number of steps outside of the courts to try and stop or adjourn the petition or, once the courts have issued a winding-up order, you can apply to have the winding-up order cancelled.

 

What is a winding up order?

A winding up order is an order given by the courts as a way of forcing an insolvent company into liquidation. It can be used by creditors to enforce debt repayment or to push a company into liquidation whereby they receive the monies owed through the sale of the business’s assets.

A winding up order is sometimes used unnecessarily by a creditor, therefore there is often room for negotiation and appeal. There are a few ways in which a company can go about preventing a winding up order, but each need to be done with the help of a professional insolvency practitioner to ensure all guidelines are followed.

 

How to appeal a winding up order

In this article, we will focus on the court process for a winding-up order, but you can read more about your options for adjourning or stopping a winding-up petition on our dedicated page. There are two situations in which you can cancel out a winding-up order:

 

• Your company is able to pay its debts and can prove solvency;
• You couldn’t attend the original court hearing for the winding-up petition.

In both situations, you must make the application to cancel the winding-up order within 5 working days of receiving the order otherwise, the application will be rejected. 

The first step for applying to cancel a winding-up order is to fill in a form titled Form 7.1A. You must write a witness statement giving details of the company’s financial position and take this, along with form 7.1A and the court fee, to the court that issued the winding-up order.

 

What are the Fees to Apply to Cancel a Winding Up Order?

If the winding-up order was issued by a district registry or the Companies Court, the fee will be £155.  If it was issued by a county court, it will vary from court to court and you will need to check directly with them.

What do I need to do whilst waiting for a court hearing?

Once you’ve filed your application, you will receive a date for a court hearing. This is generally quite shortly after the application date, within one or two weeks. You must:

 

• Serve a copy of the application to cancel the winding-up order to the creditor who originally brought the petition against the company.
• Serve a copy of the application to the official receiver appointed by the courts when the order was issued.

You can either:

• Give the copies to the relevant parties yourself;
• Get a process server to serve the documents;
• Send them by registered post;
• Post them through the letterbox of their known addresses.

What happens during a court hearing for a winding up petition?

You will need to present your case to the registrar or district judge, depending on where the hearing is being held. As this will be your final chance to stop your company from being wound up, you should ensure that you prepare for the hearing and be able to make a case for why the company should not be wound up (generally this will rely on you being able to prove that the company can in fact, pay its debts).

The court will either make a decision as to whether they rescind the winding-up order or not at the end of the hearing or, set a date for a further hearing if they think that they need more evidence to make the decision. If the court decides not to rescind the winding-up order and you disagree with the decision, you may be able to appeal to the High Court.

Where can I get advice on compulsory liquidation?

If you’ve received a winding-up order, you may be able to have it cancelled. We’re happy to help guide you through this difficult process. At The Insolvency Experts, we provide all of our clients with expert advice and professional, financial support. 

If you are facing liquidation, or face any financial difficulties for that matter, contact us today to find out how we can help you and how you may be able to stop or reverse this process.