Saving Businesses

“Monday morning spent at the Companies Winding-Up Court, in London, is a sobering experience.”

 

The Master entered the court and the fifty or so people in the room, many of them wearing “caps”, the term used for legal wigs, and wearing lawyer’s robes, stood in customary respect. I was standing on the edge of the room along with others less formerly dressed. I was just a spectator, but some of those standing beside me were company directors there to represent themselves in defence of petitions, of various sorts, to close their businesses.

We each had five sheets of A4 paper with the long list of company names being petitioned today. Once the Master had entered and sat down the court official started the slow and relentless recitation of failing company names, a little like a chant, a prayer to capitalism.  “Master” is the term used in this court for the presiding judge who adjudicates between petitioner and the company representative, if they turn up. If no one is there to defend the petition it is automatically approved, providing the paperwork is in order, which it often isn’t. Starting at the top of the list each petitioner in turn stood up to ask for something from the Master. In the majority of cases it was the lawyer working for HMRC, as often it is the government who are chasing failing businesses for cash.

Most cases took no more than a minute though occasionally some more interesting discussion took place and the Master had to decide if she was going to allow the director’s plea for more time to pay, or not.  In general she seemed fair and supportive of people struggling to pay, if there seemed some real prospect of it actually happening.

I was there as a guest of Tony Groom, one-time Turnaround Practitioner of the Year and something of an expert on manoeuvring your business through difficult times. He specialises in saving businesses and his knowledge of due process and the opportunities to clean-up balance sheets, that the various insolvency mechanisms allow, was impressive. It surprised me just what you could do to relieve yourself, perfectly legally, of a cost base that is bringing your business down.

Tony runs K2 Business Rescue www.rescue.co.uk and you’d have to go some to find anyone better able to guide you through the options and the processes if your business gets close to failure. He has also written the interesting Winding-Up Petitions Guide which you can get free from Tony’s website if you want to understand more.

I was quite surprised at the high percentage of administrative mistakes with the winding-up process. One particular area of difficulty seems to be serving the petitions themselves, with several left on desks and in one case pushed between the bars of a gate. Also address details being wrong was quite common.  In general the Master allowed these errors, but the one that had directed the company being petitioned to the wrong court she refused.  Rather then being in the Royal Courts of Justice, in London, this court has now moved to the Rolls Building around the corner and on that she wanted to make a point.

For whatever reason, if you want to find out more about winding-up petitions and what to do about them or, more generally, how to save your dying business, Tony is your man. I don’t recommend having to stand on your own, in a very full room of lawyers, pleading for a stay of execution on your business. It looked to me to be a very unpleasant and lonely experience.

Mark

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