Calling all creditors! Whilst you might think the procedure for presenting a petition against a debtor is simple, it seems that the English Legal System is keeping you on your toes!
The Risks of Presenting D.I.Y Petitions
Recently we have had an influx of creditor client’s approaching us to assist them with the amending and filing of bankruptcy and/or winding up petitions (“WUP”) against debtors that they have prepared themselves and presented at court. If the court finds an error in the petition, depending on the materiality of the error, the court may:
- Waive the error, making any necessary amendments to ensure that the winding-up order is drawn up correctly;
- Grant permission to amend the petition (possibly requiring the petitioner to re-serve the amended petition or give notice again) and adjourn the hearing of the petition in the meantime;
- Dismiss or refer the petition.
If you have made an error in the petition you are entirely in the court’s hands in respect of how that error will affect the insolvency proceedings going forward. When exercising their discretion, the court will take into account risk that the error has prejudiced other parties (for example, an incorrect name may have prevented creditors from knowing which company the winding-up hearing was in respect of).
Relatively common errors include errors in respect of the registered address of the company. Such minor errors will usually be waived or amended at the hearing. However, should the court think the error is sufficient to require the petition to be re-served or notice in the gazette to be provided again, at this stage, there is a fair bit of work to do to get the petition back on track, not to mention the additional costs that you will incur in dealing with the additional requirements set by the court.
An example of such an error can be where a creditor states that a debtor company is an undertaking within Article 1.2 of the EU Regulation on Insolvency Proceedings when it isn’t (i.e. (m) on the current COMP 1 Form). This is a fundamental mistake that has legal ramifications that the creditor may not have considered. In this instance, we were able to step in and obtain an adjournment of the petition hearing to amend the petition, re-serve the amended petition and give notice again in the Gazette.
Often a creditors main aim is to recover monies from debtors as quickly as possible and at as little costs as possible. Unfortunately, instructing a solicitor to help you amend and re-serve petitions is often more costly than if the solicitor had prepared and presented the petition for you initially plus it save you an awful lot of stress!
Please contact us on 0207 467 3980 and speak to a member of insolvency team now – it might be that your case will qualify for and can undertake on our fixed fee basis. Alternatively email us with your query at email@example.com and we will be sure to call you back straightaway at a time convenient for you. All communications will, of course, be dealt with in the strictest of confidence.