Can a winding up order be reversed?

If a winding up order is made by the court on the application of a creditor, it is possible for the company directors to make an immediate application to the court for the stay or sist of the winding up order. These are legal terms but the essence of this that the application must be made immediately before the order made by the court is perfected.

‘Perfected’ means that the court has applied a seal to the order in the back office and the order has become fully valid. This can take approximately 24 to 48 hours to happen so an immediate application is required.

In these circumstances, the directors should provide information to the court as to why the affairs of the company might be better dealt with by an alternative process, possibly a Company Voluntary Arrangement (CVA) or an Administration. Chamberlain & Co can provide details of why those processes may have a better outcome, should you wish to contact us.

For example, if a stay is granted by the court, it will be possible for the directors to propose that the company’s affairs be dealt with by a Company Voluntary Arrangement. The principle benefit of this is that the directors will retain control over the assets, subject to a creditors agreement on how those assets should be used, and remain in full control of the company. Even if it is not possible to successfully apply for a stay of the winding up order, it is still possible for the Insolvency Practitioner or the Official Receiver acting as Liquidator to consider the option of the company entering a Company Voluntary Arrangement or Administration instead of Liquidation.

Should you wish to seek more information, you can contact us on 0113 242 0808 or click here