Bankruptcy, Individual Voluntary Arrangement and Winding-up of Companies
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J. Case Illustration

Winding-up scenario

AZ Company owes Mr. C and other vendors a total sum of $500,000. Despite repeated verbal or written demands from those creditors, the company has failed to repay the debts. Mr. C, after chasing AZ Company for 2 two months in respect of his debt of $100,000, plans to institute winding-up proceedings against the company so that he can try to recover at least part of the debt.

  1. Can Mr. C file a winding-up petition against AZ Company at this stage?
  2. There is still no reply from AZ Company, even after it received the written demand. Can Mr. C proceed to file a winding-up petition in Court?
  3. In addition to delivering the winding-up petition to all relevant parties, must Mr. C also advertise the petition in newspapers?
  4. Mr. C knows that AZ Company’s bank account will be frozen after the presentation of a winding-up petition against it, but he is still afraid that the company’s assets may be dissipated in other ways. What should he do?
  5. After the presentation of a winding-up petition, AZ Company is trying to raise money to pay off its debts. The company has shown some written evidence to the Court and its creditors regarding such effort. Can the company apply to the Court for dismissing Mr. C’s petition?
  6. A winding-up order is finally granted by the Court against AZ Company. What should Mr. C do in order to secure his rights on recovering the debt?
  7. Will the shareholders of AZ Company be personally liable for the debt of the company when their company is wound-up?
  8. What should the directors of AZ Company do after the making of a winding-up order?
  9. When will the winding-up process be completed?