From 1 October 2021, the majority of creditors will be able to present a winding up petition against their debtors, albeit subject to a number of additional temporary conditions. Indeed, in order to issue a winding up petition prior to 31 March 2022: –
- The debtor must owe at least £10,000;
- prior to presenting a winding up petition, the creditor must have made a formal request for payment from the debtor, including a request for payment proposals;
- if the debtor has not made a payment proposal which is to the creditor’s satisfaction within 21 days of the formal request, the creditor can proceed to present a winding up petition.
Whilst there is no guidance as to what a satisfactory proposal might be, creditors must be prepared to explain to the Court (when presenting a winding up petition) why their debtor’s payment proposals were not satisfactory.
There is no requirement for a creditor to act reasonably when rejecting payment proposals for its debtor and a creditor will be able to apply to Court to disapply or reduce the timing for the payment proposal procedure.
Whilst the debt must be at least £10,000 in order for the creditor to present a winding up petition, that does not apply to statutory demands which can still be served if the debt is at least £750. However, a winding up petition based on such a statutory demand is unlikely to succeed bearing in mind the above tests.
Commercial Rent Arrears
Unit at least 31 March 2022, commercial landlords are still prohibited from presenting winding up petitions for monies due under a lease unless they can prove that non-payment is not due to the financial impact of the pandemic.
It is expected that the Government will introduce further legislation to deal with commercial rent arrears which have accrued during the pandemic.
Commercial landlords can still commence county court proceedings to claim monies due under a lease.
For futher information and to discuss this, or similar issues, please contact Janes Rees, Associate Solicitor – JRees@berrysmith.com