It is often the case that many directors of Companies facing a compulsory winding up by the Court are fairly relaxed due to the hearing date being several weeks away.
It can come as a considerable shock therefore to receive a phone call out of the blue from the Company’s bankers advising that the Company’s bank account has been frozen. If the Company factors its debts it will in all probability receive a similar call from the factoring company.
The reason for this is that it is requirement of the Court that a petitioning creditor places an announcement in the London Gazette that the Company is facing a possible winding up. This is known as “notice to the world”.
All of the banks have their own teams who read the Gazette on a daily basis and check whether any of their corporate customers are listed. If it is the case they automatically immediately freeze the account.
Fortunately there is a solution, however it is complicated, specialist, time-consuming for both the directors and the Company’s accountants and comes at a price.
The solution is to make an emergency application to the High Court for a “Validation Order”. The bank will invariably then rely upon this Order and unfreeze the account without any risk of being subject to any criticism.
Validation Order applications are invariably matters of the utmost urgency as the Company needs to pay creditors and wages. We can normally complete an instruction within 5 working days including arranging and attending the emergency Court Hearing.
We are specialist in making these types of applications and have a wealth of experience behind us. We cannot guarantee we will obtain an Order however we do have an enviable record of successful applications in the High Court. If you would like further information or just a chat please contact Tim or Grenville on 01427 891 892.