IVA Glossary
W
Winding Up Petition
The term "winding-up petition" denotes a special petition presented in front of the Court in order to get a Winding Up Order, namely, an order according to which a company can and will be placed into compulsory liquidation.
A winding up petition is needed because a third party is not accepted to attempt to close a company simply with the intention of recovering debts. The truth is that winding up is not necessarily from the creditors' perspective, as they can recover their money in other ways.
Nevertheless, in such a case when the other alternatives of obtaining payment of debt do not work, creditors might issue a winding up petition. This leads to a court hearing. Debt counsellors or insolvency practitioners assist and represent the people involved in such cases.
In case the winding up petition is proven to be successful, the Court appoints an administrator to conclude the affairs of the company in question. Creditors, as well as employees and trade creditors, are in this case paid from the available funds if these exist, and the company in question will be finally dissolved which means it will no longer have real being.
A winding up petition is needed because a third party is not accepted to attempt to close a company simply with the intention of recovering debts. The truth is that winding up is not necessarily from the creditors' perspective, as they can recover their money in other ways.
Nevertheless, in such a case when the other alternatives of obtaining payment of debt do not work, creditors might issue a winding up petition. This leads to a court hearing. Debt counsellors or insolvency practitioners assist and represent the people involved in such cases.
In case the winding up petition is proven to be successful, the Court appoints an administrator to conclude the affairs of the company in question. Creditors, as well as employees and trade creditors, are in this case paid from the available funds if these exist, and the company in question will be finally dissolved which means it will no longer have real being.
