Return of Winding-Up Petitions and Statutory Demands
The pandemic caused these to halt meaning these methods of enforcement have been off the table which has caused a very difficult situation for all parties concerned.
As of Friday 1 October 2021, Winding-up Petitions and Statutory Demands are back and are a useful tool for means of recovery of debts. The Winding-up Petition however has further restrictions in that it has temporarily been raised from £750 to £10,000, this being the minimum amount. Although this is deemed as a temporary measure at this stage it is suspected that this threshold may stay after the next review, this being 31 March 2022.
The lifting of restrictions will be of great relief to many struggling companies who will now be in a position to pursue enforcement and use Statutory Demands and Winding-up Petitions to enforce recovery of their debt.
Further restrictions remain in place in that between now and 31 March 2022 additional conditions apply:-
– Commercial landlords are unable to present a Winding-Up Petition in respect of commercial rent arrears which have built up during the course of the period of the pandemic.
– A period of 21 days must be sought from the debtor company giving them this time to respond before a Winding-Up Petition can then be presented.
– Creditors are only allowed to proceed with the Winding-Up Petition if the debtor has not made proposals within the 21 day notice period.
– As stated above Winding-Up Petitions can only be made if the total debt exceeds £10,000.
It is clear that the last 18 months or so has been a tough time for all but has certainly ensured open dialogue between creditors and debtors and now that further restrictions have been lifted this may mean that some of the financial angst is eased and that a getting back to “normal” or certainly near normal is possible.
For further details on Winding-Up Petitions and Statutory Demands contact the Commercial Litigation and Dispute Resolution team.
*This article is provided for general information purposes only and does not constitute legal or any other professional advice.