Effect on proceedings against a company being wound up and after a winding-up order is made


Produced in partnership with Karl Anderson of 4 Stone Buildings
Practice notes

Effect on proceedings against a company being wound up and after a winding-up order is made


Produced in partnership with Karl Anderson of 4 Stone Buildings

Practice notes
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This Practice Note sets out guidance as to what happens when proceedings have been commenced against a Company and:

  1. •

    a Winding-up petition is presented against the company, or

  2. •

    the company's members pass a resolution to wind it up through a creditors' voluntary liquidation (CVL)

Any formal insolvency proceeding is a collective remedy. This means that all unsecured creditors rank equally. A judgment obtained in any proceedings against the company does not create any form of priority over other creditors in the same class. Nor is a judgment any form of security. It follows that the decision whether to continue proceedings against a company which is being wound up is primarily a commercial one rather than a legal one. There is frequently no commercial advantage in incurring further legal costs against an insolvent company. For further reading, see: Proof of debt—overview.

It should also be borne in mind that any disposition of any company property after the presentation of a winding-up

Karl Anderson
Karl Anderson

Barrister, 4 Stone Buildings

Karl is a barrister with a broad commercial chancery practice. He is frequently instructed on matters relating to banking and finance, restructuring and insolvency, company law, civil fraud, and general commercial disputes. He often appears, both on his own and as part of a larger counsel team, in the High Court and the County Court.
 
Examples of recent reported cases include Autonomy Corporation Ltd v Lynch [2022] EWHC 1178 (Ch) and General Electric Company v AI Alpine US Bidco Inc [2021] EWHC 45 (Ch).
 
Karl is also a contributing editor to Zuckerman on Civil Procedure 4th Ed. (2021) (Sweet & Maxwell) and a contributor to Loose and Griffiths on Liquidators 9th Ed. (³ÉÈËÓ°Òô® 2019).

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Company definition
What does Company mean?

Company denotes an association of individuals formed together for some common purpose.

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