Hearing of the winding-up petition

Hearing of the winding-up petition

September 1997 

45.64 Appearance at the hearing

(Amended April 2009)

Anyone wishing to appear at the hearing of the petition should give notice to the petitioner (at the address in the published notice of the petition or via his solicitor) of his intention to do so. He must inform the petitioner of his name, address, details of his solicitor, the amount and nature of his debt and whether he intends to support or oppose the petition [Note 1].

The petitioner must supply to the court on the day of the hearing a list of persons, if any, who have indicated their wish to attend [Note 2]. 


45.65 Attendance by Office-Holders

Administrators and administrative receivers have the power to defend a winding-up petition presented against a company and may appear at court and be heard [Note 3]. A voluntary liquidator may attend the court at the hearing of a petition and can give evidence of what he has found and what the present position is for the assistance of the court only. He should not express a view as to whether the petition should be granted or not [Note 4]. 


45.66 Powers of the court on hearing the petition

(Amended October 2010)

Section 125 of the Insolvency Act was designed to give the court the widest discretion at the hearing of the petition. The court may dismiss the petition, may adjourn the hearing (conditionally or unconditionally), may make an interim order or any other order it thinks fit - with the proviso that it cannot refuse an order only on the basis that the company has no assets or that the company’s assets have been mortgaged to an amount equal or in excess of those assets.

If a petition is presented by members as contributories on the just and equitable ground, the court may dismiss the petition at the hearing if it thinks that the petitioners have some other remedy open to them and that they are acting unreasonably in seeking winding up instead of pursuing that other remedy. [Note 5]

If the hearing is adjourned by the court, and unless the court otherwise directs, the petitioner must send notice of the making of the order of adjournment to the company and to any creditor who has given notice under Rule 4.16 but was not present at the hearing. The notice must state the venue for the adjourned hearing [Note 6]. 


45.67 Creditors wishes

As with all matters relating to winding up, the court may have regard to the wishes of creditors and contributories when deciding whether to make an order [Note 7]. Clearly if the majority both in number and in value of the company’s creditors are opposed to liquidation, then ordinarily the court will refuse a winding up order [Note 8]. However, the nature and quality of their debts is also a material consideration. For example, if the majority of creditors are secured [Note 9] or have other vested interests, say, as shareholders or directors [Note 10], their wishes may not carry sufficient weight to prevent a winding-up order. 


45.68 Ulterior motives

The court will always be aware of the need to preserve the integrity of the liquidation process [Note 11]. The granting of a winding-up order is a remedy designed to benefit all of the company’s creditors not to further any ulterior motives that the petitioner may have [Note 12]. 


45.69 Costs

Upon disposing of a winding-up petition the court has a wide discretion on the question of costs [Note 13]. If the petition fails, the petitioner will usually be expected to meet the cost of the abortive petition. This may not be so if in some way the company caused the petition to be presented in the first place [Note 14].



[Back to Part 5 - Consequences of a winding-up petition - protection of assets] [On to Part 7 - Bankruptcy and the jurisdiction of the courts]