Winding Up Petitions in times of Coronavirus (COVID-19)

If you have a pending Winding Up Petition at this time, or were contemplating issuing one, this note looks at how the courts are dealing with Petitions in light of the recent government guidance to the public and practice directions for the legal professions.

Those who are familiar with the general winding up list will recognise that a weekly court with multiple barristers, solicitors, company directors, court staff and an Insolvency and Companies Court Judge –  often totalling in excess of 50 people is clearly not consistent with current social distancing guidelines.

The court ‘sat’ for the first time since restrictions were imposed on Wednesday of this week (25/03).  Notwithstanding the Practice Direction on remote working (https://www.judiciary.uk/wp-content/uploads/2020/03/Civil-court-guidance-on-how-to-conduct-remote-hearings.pdf), it was not considered possible to effectively deal with this list remotely.

As such Insolvency and Companies Court Judge Mullen adjourned off all 306 Petition hearings, in batches to dates 12 – 19 weeks in the future.  With no obvious online/remote substitute for the general winding up list it is not difficult to envisage the same approach being taken in coming weeks.

Provision was made in ICC Judge Mullen’s order for Petitions to be dismissed on the basis of paper applications to be listed in a general dismissal list to be established via Skype (or similar alternative), and the provisions for Petitions to be withdrawn following an application on paper remains.

As for future petitions, it is being reported that the Government is considering a moratorium on the issuing of Petitions to assist struggling businesses in the face of the impact of Coronavirus:

https://www.cityam.com/government-to-push-through-insolvency-reforms-as-coronavirus-crisis-bites/

https://news.sky.com/story/coronavirus-ministers-race-to-reform-insolvency-laws-11963361

Those contemplating issuing a Petition may wish to do so promptly to avoid the risk of a moratorium biting that prevents further Petitions being issued. Alternatively if you are dealing with an extant Petition which you wish to have dismissed or withdrawn, members of 1 Chancery Lane are available to assist with navigating these processes. Simply get in touch here.