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Winding-up, compulsory: petition

A petition h may be presented by a contributory and/or a creditor; it may also be presented by the company by special resolution; the Department of Trade and Industry may petition as a result of an investigation; or the official receiver may petition when a voluntary winding-up is in process. A contributory must have held his shares for at least six months during the preceding eighteen months (this could include a person on the B list). The court will probably call meetings to discover the wishes of creditors and other contributories.

In the case of a creditor’s petition, the court must make an order for winding-up if the creditor has an undisputed debt and the company is insolvent. The court may order the petition to stand over for a while generally, where the debt is disputed. The court may also consult the wishes of the other creditors before making an order. The assignee of a debt can petition, as can creditors, for contingent liabilities, though they will have to show that there are good grounds for winding-up. In any event, the debt must be a liquidated debt, debenture holders cannot normally petition where there is a trust deed, neither may they petition where there is power to appoint a receiver and they have not done so.

Reference: The Penguin Business Dictionary, 3rd edt.