What is a Validation Order?
A Validation Order is an order of the Court that permits the disposal of company property following the presentation of a winding up petition.
Stephen Chinnery and his team of specialist insolvency lawyers have years of experience in pursuing Validation Orders.
Do I need a Validation Order?
If you are the recipient of a winding up petition and you plan to dispose of any property (which includes paying any money out of the Company bank accounts) you will need to obtain a Validation Order.
Our team of solicitors and Counsel will steer you through this process.
My bank has frozen my company bank account – why?
Your bank does not want to be held liable for money paid out of the company bank account between the date of the petition being presented and the subsequent liquidation of the company.
The Insolvency Act 1986 section 127 says that the disposition of company property between these dates is void without the consent of the Court.
When will my bank unfreeze my company bank account?
Your bank will unfreeze the company’s bank account when they receive an Order of the Court stating explicitly that dispositions from the particularised account numbers are not void contrary to section 127 Insolvency Act 1986.
Contact our specialist Validation lawyers today to discuss obtaining a Court Order to unfreeze your company bank accounts.
What do I need to do to get a Validation Order?
You will need to make an Insolvency Application to the Court that is charged with the conduct of the winding up petition facing your company. That could be either the Business and Property Division of the High Court or a County Court.
For detailed arrangements contact our Validation Order lawyers today.
Do I need lawyers that specialise in Validation Orders?
Insolvency law is a specialist field. The rules of procedure are entirely different from mainstream civil proceedings. A lawyer that does not routinely deal with insolvency law disputes will be at a serious disadvantage in dealing with your case.
Contact our expert insolvency disputes team today to discuss your Validation Order application.
I have seen firms on the internet advertise about Validation Orders but they are not solicitors. What can they do for me?
The answer is they can offer you very little. Some firms say that they will act as a conduit between you and the lawyers that they instruct on your behalf however that is entirely unnecessary.
Only a firm of solicitors can act for you in a Validation Order application as your representative at Court. A firm of non-solicitors can only refer you to a firm of solicitors which is something you can do by yourself.
In our experience those firms often refer clients to non-specialist insolvency law firms.
What is the procedure for getting a Validation Order urgently?
An Insolvency Application needs to be drafted supported by a witness statement and exhibits. The application needs to be accompanied by a draft order and notice needs to be given to the petitioning creditor and possibly others.
The advocate appearing at Court will need to prepare a Skeleton Argument setting out all of the factual and legal circumstances. A Court date will be set and your advocate will need to attend Court to make representations on your behalf.
For a full discussion about what precisely is needed contact our Validation Order experts.
How quickly can I get a Validation Order?
The Court recognises that this is emergency business. Your bank accounts may be frozen and you may be unable to conduct any business. Your suppliers may be going unpaid and staff wages may be stalled.
If all of your documents and accounts are in good order we would aim to lodge an application within 24 hours of receiving instructions. There is no reason why a Court Order could not be obtained within 48 hours if the Court can accommodate the application which they commonly can.
Call us today to discuss the timing of your Validation Order application.
What happens after I get a Validation Order?
In the event that a Judge rules in your favour and grants a Validation Order a sealed copy of the Court Order will be made available to your solicitors. Because of the urgency of the matter that should happen on the same day.
Once you have a sealed copy of the Validation Order granting the release of monies from specific accounts you should take that to your bank manager immediately. Normally, the bank will release the block on the account immediately.
If there are any delays in getting your bank account unfrozen get in contact with us immediately and we can bring pressure to bear upon your bank to act in accordance with the banking mandate.
Contact Stephen Chinnery and his team today to secure your Validation Order.
What will my bank do after I get a Validation Order?
Following the granting of a Validation Order your bank can no longer be held liable for monies paid out of your bank account. Section 127 of the Insolvency Act 1986 says that upon the winding up of a company all disposals of company property (from the date of the presentation of the petition) are void without the leave of the Court. This means that a Validation Order will have taken away (for the bank) the peril of falling foul of section 127 – which will only impact them once they receive notice of the winding up petition.
Your bank should immediately restore your full banking facilities in accordance with the Validation Order. If your bank do not unfreeze the Company’s bank account consult with us immediately to discuss how your bank can be forced to restore your company’s banking facilities in full.
What will happen to the Winding Up Petition after I get a Validation Order?
A winding up petition can normally only be dismissed or withdrawn at the hearing of the petition. This means that a Validation Order allows the Company to continue to trade up until the Court either dismisses the petition or orders the winding up of the Company.
This means that the petition will have to be either defended or worked out with the petitioning creditor.
Contact Stephen Chinnery and his insolvency law experts to advise you about how to dispose of winding up petitions.