What Do You Do if You Receive a Threat of a Winding Up Petition?

October 2023
Region: Europe

An immediate concern for any company is a threat to present a winding up petition made in an email or letter – regardless of the size of debt, whether the debt is disputed or the company has a counterclaim.

The consequences of ignoring such a threat can have an immediate and adverse impact on a business. Failure to respond can be used as evidence that the company is unable to pay and that can be used as evidence to support presentation of a winding up petition.

The risk for companies is that a letter can often be overlooked or not taken seriously, and it may also give very limited time to respond.

We have seen an increasing trend of creditors becoming aware of winding up petitions almost immediately after they are presented. This limits the options available to a company to deal with a petition – even if the petition is vexatious or the debt is disputed.

It is therefore key that companies spot these types of demands and deal with them.

In our latest Insight we explore what companies should look out for and the options available if a company receives a demand letter.