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ValidationOrders

A winding-up petition will freeze your company bank account.

A validation order is the court order that lets the company keep paying wages, suppliers and rent while the petition is dealt with. We prepare and file the application for a fixed fee.

Where you are in the process decides what we can do

The petition follows a fixed sequence. The freeze happens at step four.

  1. Day 0 Petition served at the registered office
  2. Days 1 to 7 The petitioner must wait before advertising
  3. Advertisement The petition appears in the Gazette
  4. Within hours The bank sees it and freezes the account
  5. Hearing The court decides whether to wind the company up

If the account is already frozen

The bank is not being obstructive. Under section 127 of the Insolvency Act 1986, payments made after a petition is presented can be reversed if the company is later wound up, and the bank does not want to carry that risk. Only the court can release it.

What we do

  • Review the petition, the hearing date and the company's position the same day you call.
  • Identify the payments the company needs to make and the evidence that supports them.
  • Draft the application and the witness statement.
  • File at the insolvency court and attend the hearing.

Most directors call us with payroll days away. Say so when you ring and we will tell you straight away whether the timing works.

What the court wants to see

The court is protecting the creditors as a group. An application succeeds when it shows that the payments keep a viable business running and leave creditors no worse off. Routine trading payments are granted regularly. Payments that move value to directors or connected companies are not.

Bring these if you have them

  • The petition and any correspondence from the petitioner
  • Recent bank statements and management accounts
  • A list of the payments the company needs to make, with amounts

If the petition has not been advertised yet

This is the better position to be in and it does not last. Once the waiting period passes, the petitioner can advertise, and the freeze follows quickly. An application made now can be in place before the bank acts.

Why acting early is worth it

  • The company keeps trading without a gap in payments.
  • Wages, suppliers and rent carry on while the petition is dealt with.
  • You are not applying under emergency pressure with a court date in days.
  • Staff, customers and suppliers are less likely to find out through the Gazette first.

What else to consider

A validation order handles the payments. It does not address the petition debt itself. Depending on the position there may also be scope to dispute the debt, agree terms with the petitioner, or apply to restrain advertisement. We will tell you which of those apply to your case when we look at the papers.

If you have been served today, ring today. The window is measured in working days.

What a validation order does, and what it will not do

We would rather you knew this before you instruct us than after.

It does

  • Allow specified payments to be made despite the petition
  • Give the bank the cover it needs to release the account
  • Let the company trade while the petition is resolved
  • Protect the validated payments from being unwound in a later liquidation

It does not

  • Reduce the prospect of the company eventually being wound up
  • Settle, reduce or dispute the petition debt
  • Stop other creditors supporting the petition
  • Stop the hearing going ahead

If the petition debt is left unpaid, the court can still make a winding-up order. A validation order buys the company room to trade and to find a resolution. It is not a defence to the petition.

Fixed fee

[FEE]

[FEE_NOTE]

What the fee covers

  • Initial review of the petition and the company's position
  • Advice on whether an application is likely to succeed
  • Drafting the application and supporting witness statement
  • Filing at the insolvency court
  • Attending the hearing

You will know the fee before you instruct us. If we think an application is unlikely to help, we will say so and you will not be charged for finding that out.

Femi O. Ogunshakin

Solicitor, Tax Adviser and Former HMRC Inspector

Validation order applications are a large part of my practice. Most of the petitions I deal with are brought by HMRC, and my time as an HMRC inspector means I know how the petitioning side builds and runs these cases.

You will deal with me directly rather than with an introducer or a case handler. The work is carried out through Nexa Law, where I practise.

Talk to us today

If the account is frozen, ring. It is faster than anything else on this page.

01744 747 299

Outside office hours, or if payroll is days away: 07867 795439
Email femi@loftusstowe.com
Not urgent? Book a 30 minute call.

We use these details to respond to your enquiry. Nothing else.