What is a Winding Up Petition? How To Stop a Winding Up Petition?

Injunction to restrain winding up petition, or WUPs, are legal procedures taken against companies who owe debts of £750 or more by creditors who owe money. By filing formal petition with the court, creditors may pursue recovery.

Winding-up petitions cost money and should only be utilized when all other means to recover funds have failed. When winding-up petitions become public knowledge, additional contractors and suppliers may cut ties with the business causing further complications.

Recourse to legal action for debt collection can be the last resort if other attempts at collecting have failed, often following numerous court appearances and hearings scheduled between four and eight weeks post petition issuance date have failed to bring about payment. At that point, hearings can take place and it could result in the court issuing an order to wind-up which could ultimately lead to liquidation; so it is crucial that action are taken as soon as the petition for winding-up is received in order to save the business from closing down permanently.

Consider these points if you receive an application to wind up.


It is crucial that all parties involved understand the anticipated timelines for winding-up procedures so they can meet any critical deadlines on schedule. The initial step involves filing the petition before the court, along with payment of court fees at this point. After considering it and setting a hearing date within 4-8 weeks, if needed.

Winding-up petitions must be sent directly to the company in question, informing them of both hearing date and amount due. Furthermore, their petitioner – usually creditors – should publish details about this petition in London Gazette so as to notify any additional creditors of its existence at least seven working days after service of petition and seven working days prior to hearing date.

Void dispositions

After a winding up petition has been granted, any subsequent sales of assets become invalid unless an order of validation from court is obtained and can be recovered from any liquidator later. This applies both to payments of debts as well as distributions done with good intentions.

People receiving invalid dispositions may not know about a winding-up petition and will therefore need to repay any money they were given and depended on. There may be instances in which the court issues a validation order to allow payments, particularly in instances when this payment is essential to daily management of the company. You can apply retroactively for such orders of validation; however, court’s primary goal should be upholding paripassu principles.

Winding-up petition advertisement

Prior to hearing of a winding-up petition, its publication in London Gazette is an essential component. Without this step completed, courts cannot issue winding-up orders and make decisions on winding-ups. It also notifies other creditors who might be interested, credit reference agencies and banks of its approval and gives other interested creditors notice of its approval as support creditors; these creditors can contact the solicitor representing the petitioner with evidence regarding their credit history and attempts at getting it back so as to be present for hearings before presenting evidence before judges.

Given the grave consequences that can accompany publishing an announcement of a winding-up petition in an advertisement, extreme care must be taken in ensuring all information provided is accurate. Any misstatements could allow businesses to seek damages from those responsible.

The seven-day window

No advertisement must be published in the London Gazette with details of a petition for winding-up until seven days have elapsed since delivery to the petition. This time allows businesses an opportunity to settle the petition prior to its publicization in an advertisement; once published, business may collapse as banks may bar customers from accessing accounts and creditors may stop providing services; further debt could become burdensome and cause the business’s credit score to suffer as a result.

Reaching out to the petitioner and meeting their demands could prevent their petition being made public.

Disputing the debt

Any part or all of a debt could be challenged on grounds of considerable importance; to prevent an advertisement from appearing in London Gazette with an injunction application being filed quickly to stop this process from continuing, as quickly as possible is key. If, for example, at least £750 of value of an outstanding debt remains disputable however the winding-up process continues, this likely won’t stop.

Requests for injunction should include a statement by either a director of the company or another employee outlining why the debt is disputed and evidence of its finances and most recent financial statements. If a business that is the subject of a winding-up petition can demonstrate legitimate cross-claims against creditors, courts could delay or deny their petition and also grant an injunction that prohibits publication of advertisements against it.

Paying the debt

If the debt is uncontroversial and payable in full, you could avoid an announced petition by paying it off as soon as possible. You may be required to cover costs associated with petitioning as well as legal fees associated with them; however, your creditors might offer alternative methods of repayment; it’s essential that all creditors involved, not just those who filed it themselves, receive due consideration when responding. Any creditor with debt of £750 or more outstanding may still take the case forward even after its original petitioner withdraws – making sure all creditors’ needs are taken care of

Security for costs

When an application for winding up order is filed by someone without funds or jurisdiction within court’s reach, they run the risk that should it be rejected and costs ordered against them, they won’t comply and leave their business exposed to legal expenses debts that must be met from somewhere.

To prevent this from happening, defendants can make an application to the court seeking a security for costs order. To comply with such an order, petitioners will be required to pay either in court or provide assurance or policy as security; should your case go against you, this money will then be used to cover your costs as the defendant. An application should be made as soon as possible following receipt of notice that a winding-up petition has been received; or if other circumstances suggest they won’t be able to fulfill its costs order issued against them this could also justify making such an application – otherwise

How To Stop a Winding Up Petition?

An urgent response must be taken when facing petitions for winding up or the threat thereof. Here are five strategies for dealing with such petitions or the likelihood that one will be issued.

Repay the money owed

It is essential that the amount owed be fully repaid along with costs from creditors. If possible, consider repaying everything except £750 so as to meet the minimum requirement for petition to wind up (but watch for interest that continues accrueing).

Agree a Time to Pay Plan with the Creditor

Contact your creditor and negotiate an arrangement to pay back debt in installments, such as setting up a Company Voluntary Arrangement (CVA). A CVA allows businesses to reduce debt quickly while giving directors control of operations as they try to turn around their fortunes.

Dispute a Winding Up Petition

After receiving a winding-up petition, companies have the right to contest it by asking the court for an injunction or validation order. To obtain such an order of validation, businesses must present information to the court about any payments planned to cover debt owed; further, this information must be supported with an official witness document detailing how creditors will benefit if a payment arrangement is approved by court.

Enter Administration

Directors of companies may use administration as a form of legal protection by obtaining an administrative moratorium against creditors that seek to take over their company. Administration provides breathing room to organize their company, save or improve operations as well as improve returns to creditors should business obligations go unfulfilled. Pre-pack administration offers another form of administration process – placing bankrupt companies into administration, then selling off any viable assets (if applicable).

Creditors Voluntary Liquidation

Creditors Voluntary Liquidation is usually the last resort for directors when faced with intense pressure from creditors and having explored all available solutions, they feel no other option is feasible.