A Company (Injunction To Restrain Presentation of Petition)

A Company (Injunction To Restrain Presentation of Petition)

Given the high likelihood that the Corporate Insolvency and Governance Bill 2020 will be enacted imminently and will have retrospective effect to 27 April 2020, and given the strong evidence that COVID-19 had a financial effect on the company, it is improbable that a winding up order would be made. Therefore, the court should restrain the presentation of the petition to prevent serious and unjustified harm to the company, and require the applicant to provide the usual cross-undertaking in damages.

Parties
Applicant: A Company; Respondent: Unnamed Creditor (Lessor)
Jurisdiction
England and Wales
Judgment Date
02 June 2020
Procedural Posture
Insolvency Application (injunction to Restrain Presentation of Winding Up Petition) / Interim Injunction Application
Outcome
Interim injunction granted
Legal Topics
Injunctions, Winding Up Petitions, COVID 19 Legislative Impact, Corporate Insolvency and Governance Bill 2020
Insolvency Law Company Law Civil Procedure Injunctions Winding Up Petitions COVID 19 Legislative Impact Corporate Insolvency and Governance Bill 2020

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Parties

A Company

Applicant

Unnamed Creditor (Lessor)

Respondent

Procedural Posture

Insolvency Application (injunction to Restrain Presentation of Winding Up Petition) / Interim Injunction Application

Legal Issues

  1. 1 Whether the court should grant an interim injunction restraining the presentation of a winding up petition in light of the anticipated enactment of the Corporate Insolvency and Governance Bill 2020 and its Schedule 10 provisions.

Ratio Decidendi

Given the high likelihood that the Corporate Insolvency and Governance Bill 2020 will be enacted imminently and will have retrospective effect to 27 April 2020, and given the strong evidence that COVID-19 had a financial effect on the company, it is improbable that a winding up order would be made. Therefore, the court should restrain the presentation of the petition to prevent serious and unjustified harm to the company, and require the applicant to provide the usual cross-undertaking in damages.

Court Disposition

Interim injunction granted

Orders

  • The respondent creditor is restrained from presenting a winding up petition against the applicant company until the hearing of the application for a final injunction.
  • The applicant company is required to provide the usual cross-undertaking in damages.