English court's helpful guidance on injunction to restrain advertisement of winding up petition

Background

This case involved a winding up petition presented against Bridger & Co Ltd (the Company) on 15 June 2023. The petition debt arises out of a funding agreement between the parties. The Company applied for an injunction to restrain the advertisement of the petition on various grounds. The court declined to make an injunction. 

Decision

The judgment helpfully confirms the position on three issues in these types of proceedings:

• The well-established principles to be applied by the court are equally applicable to applications to restrain presentation or advertisement of a petition.
• It is not sufficient for a debtor to claim abuse of process merely because the petitioner expected a dispute to be raised regarding the debt. The judgment confirms that if the dispute is not one that meets the standard test (genuinely disputed on substantial grounds), it is not an abuse of process for the petitioner to proceed in the face of it.
• A creditor can present a winding up petition based on a secured debt. The judge considered the "proposition that a secured creditor's rights take effect outside the liquidation…" The judge acknowledged there is no explicit statutory restriction on a petition presented based on a secured debt and that if the petitioner is secured, it has standing nonetheless to present a petition. 

Find out more

To discuss the issues raised in this article in more detail, please contact a member of our Restructuring & Insolvency team.

Bridger & Co Ltd v Specialist Lending Ltd (t/a Duologi) [2023] EWHC 2562 (Ch)