Parent company guarantees and performance bonds are typically used in the construction and engineering industries to provide a developer with some security in the event that the contractor breaches the building or engineering contract or, in some circumstances, upon the contractor's insolvency.

In the current economic climate, contractor default is, unfortunately, even more prevalent in the construction and engineering industries, and so the issues surrounding parent company guarantees and performance bonds are very much in focus for developers.

With the global recession still being felt, times are tough and many companies are struggling to collect debts from errant customers or clients. In these cases, a winding-up application is arguably the most effective way to collect substantial debt as the following example shows.