Claim that Company Can Survive as Going Concern Not a Defence to Winding-Up Petition

The High Court has granted a creditor’s petition to wind-up a company, even though they claim that the company could survive as a “going concern” following a restructuring.

The winding-up procedure is not something similar to examinership.

Examinership involves a series of ‘checks and balances’ designed to protect both the company and their creditors.  Petition for examinership must be accompanied by an independent accountant’s report, the purpose of which is to guide the court on the likely prospects of survival of the company.  No similar safeguards exist in the context of the winding-up process.

The judge concluded that a company seeking to resist a winding-up petition cannot ordinarily do so on the ground that, if given breathing space from its creditors, it will have a reasonable prospect of survival as a going concern and will be in a position to discharge the debt of the petitioning creditor.  Any such argument must be advanced by way of an application for examinership rather than by means of a defence to a winding-up petition.

Do you have any questions?

Feel free to contact Lisa on +353 (0) 1 677 9000 or by email for a complimentary confidential consultation.

Lisa Byrne is an Assistant Manager in the Audit Division and since she joined the firm in 2004 has gained a wealth of experience in all areas of accountancy and audit. Lisa’s all-round business acumen is further enhanced by her specialisation in the areas of auditing and compliance within the financial services sector. She recently managed the audits of a number of wealth management products for two global banks. Lisa's specialist areas include; Statutory Audit, Independent Mediation, Personal Forensic Investigations, and Personal Injury and Fraud Cases.