A Company, Re [2021] EWHC 2289 (Ch) (11 August 2021)

A Company, Re [2021] EWHC 2289 (Ch) (11 August 2021)

The Debtor Company demonstrated a prima facie financial effect caused by coronavirus, meeting the low threshold required. The Petitioning Creditor failed to establish that the company would have been unable to pay its debts even if coronavirus had not had a financial effect. Therefore, the statutory test for making a winding up order was not met and the petition must be dismissed.

Citation
[2021] EWHC 2289 (Ch)
Parties
Petitioner: A; Respondent: B
Jurisdiction
England and Wales
Judgment Date
11 August 2021
Procedural Posture
Winding Up Petition (insolvency) / Preliminary Hearing (coronavirus Test)
Outcome
Petition dismissed
Legal Topics
Winding Up Petitions, Corporate Insolvency and Governance Act 2020, Coronavirus Financial Effect Test, Section 122(1)(f) Insolvency Act 1986, Section 123(1)(e) Insolvency Act 1986
Insolvency Company Law Winding Up Petitions Corporate Insolvency and Governance Act 2020 Coronavirus Financial Effect Test Section 122(1)(f) Insolvency Act 1986 Section 123(1)(e) Insolvency Act 1986

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Parties

A

Petitioner

B

Respondent

Procedural Posture

Winding Up Petition (insolvency) / Preliminary Hearing (coronavirus Test)

Legal Issues

  1. 1 Whether the Debtor Company has demonstrated a financial effect caused by coronavirus under the Corporate Insolvency and Governance Act 2020 Schedule 10
  2. 2 Whether the Debtor Company would have been unable to pay its debts even if coronavirus had not had a financial effect

Ratio Decidendi

The Debtor Company demonstrated a prima facie financial effect caused by coronavirus, meeting the low threshold required. The Petitioning Creditor failed to establish that the company would have been unable to pay its debts even if coronavirus had not had a financial effect. Therefore, the statutory test for making a winding up order was not met and the petition must be dismissed.

Court Disposition

Petition dismissed

Orders

  • Petition dismissed at preliminary hearing
  • Hearing listed at 10am on 24 September 2021 to deal with matters not agreed and applications for permission to appeal