The circumstances leading up to the insolvency of a Company can be fast moving: an insolvency often occurs following the presentation of a winding up petition.
The Company will fully consider its options immediately prior to or immediately following the presentation of a winding up petition including –
Whether it wants to seek an injunction to prohibit the presentation of the petition
Whether it will contest the petition
Whether it will seek a negotiated settlement to the dispute
If the directors of the Company intend to keep it trading they need to be mindful that all dispositions following the date of the Winding Up Petition are void unless the Court orders otherwise.
In order to ensure that regular payments being made by the Company are not to be treated as void (and potentially recoverable from the directors by a future Liquidator) a Validation Order ought to be obtained from the Court .
The following issues ought to be dealt with in the application for a Validation Order –
Time is of the essence in these circumstances to ensure that the application gets to court quickly.
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