Injunction to restrain presentation of a winding up petition
An injunction to restrain the presentation of a winding up petition in respect of a company that had failed to pay rent and service charges on its premises has been granted by the High Court.
Importantly, the Court’s decision was based on Schedule 10 to the Corporate Insolvency and Governance Bill 2019-21, even though the Bill has yet to be enacted.
When making its decision, the Court took into account the fact that if the petition was presented, it was unlikely that it would be heard prior to the Bill being enacted. In the event that COVID-19 had impacted on the financial position of the company, the Court would not be able to wind up the company. From the evidence, there was a strong case that COVID-19 had impacted on the company and the facts on which the petition was based would not have arisen otherwise. In those circumstances, a petition was unlikely to result in a winding up petition being made.
When considering whether to grant relief, the Court is able to assess the likelihood of a change in law relevant to its decision and on the evidence, it was decided that, notwithstanding the likelihood that it would fail, the presentation of a petition would have a seriously damaging effect on the company.