What should your company do if faced with a statutory demand or a winding up petition? Time is of the essence where there is a threat of formal insolvency proceedings. If a winding up petition is being threatened it must not be ignored. The consequences that can flow once a winding up petition has been advertised can be devastating, both to the company's reputation and its financial position.
We identify some of the key considerations and steps that should be taken immediately so as to reduce any damage that a winding up petition can cause.
A company has outstanding debts and it seems they are struggling financially. What can you do to try and get your debts settled? Is applying to have the company wound up the answer? Here, we take a look at what you will need to consider before a decision is made and we take a look at the key steps in the process.
What is winding up?
Winding up is also known as compulsory liquidation. It is action taken by creditors of the company which (if successful) will result in the company ceasing to trade and being closed down.
In our update this month we take a look at some recent decisions that will be of interest to those involved in insolvency litigation. These include:
Our January 22, May 23, June 28,
Although it may be difficult to define precisely what an “executory contract” is (with the Bankruptcy Code providing no definition), I think most bankruptcy lawyers feel how the late Supreme Court Justice Potter Stewart famously felt about obscenity--we know one when we see it. Determining that a patent license was executory in the first place was an issue in the Fifth Circuit’s recent decision in RPD Holdings, L.L.C. v.
In hindsight, it seems inevitable that constitutional and other jurisdictional problems would arise when Congress, in enacting the Bankruptcy Reform Act of 1978, created impressive new powers and responsibilities for the bankruptcy courts (along with a considerable degree of independence) but denied them the status of Article III courts under the Constitution (by denying its judges lifetime tenure, as Article III requires). And it didn’t take long for the problems to arise.
Our July 13 post stated that the deadline for the respondent in Mission Product Holdings, Inc. v. Tempnology, LLC, 879 F.3d 389 (1st Cir. 2018),petition for cert. filed, No. 17-1657 (June 11, 2018), to submit a reply to the petition for certiorari seeking reversal of the First Circuit’s 2-1 decision had been extended to August 8.
In the era that preceded the Bankruptcy Reform Act of 1978 and its enactment of the Bankruptcy Code, bankruptcy estates often lost the value of leases and other contracts that could have been realized for creditors by use or sale as a result of termination provisions (either discretionary or ipso facto), limitations or outright prohibitions on assignment, and counterparty self-help.[1] The Code sou