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Application to wind up trading company refused as alternative debt enforcement remedies available
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The High Court refused an application by a firm of solicitors seeking to have a trading company wound up due to non-payment of substantial legal fees that had become the subject of a High Court judgment and statutory demand. Despite clear lapses in management and failure by the company to address the debt, the court found that immediate liquidation was not warranted as the company was asset-rich, operating as a going concern, and the debt was already secured by judgment mortgages over specific assets, providing adequate alternative avenues for enforcement. The court exercised its discretion to decline the drastic remedy of winding up, mindful that liquidation would severely impact employees and the local community, and concluded that the company could meet its obligations through existing enforcement means without recourse to liquidation.
winding-up petition – insolvency – legal fees debt – judgment mortgage – alternative debt enforcement – discretion to refuse winding up – asset-rich company – statutory demand – Companies Act 2014 – High Court – trading business – impact on employees – default judgment – director"s failure – cash-flow insolvency test
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