The case of Liberty Commodities Ltd v Citibank NA London & Ors [2023] EWHC 2020 (Ch) provides a helpful reminder of the principles that the court will adopt when dealing with a winding up petition – particularly where there are supporting creditors.
Even when the company and petitioning creditor have reached agreement in respect of the petition debt and wish to withdraw, they can only do that if there are no supporting creditors. Further if a supporting creditor is then substituted as the petitioner, not only does this extend the life of the petition, but it can also impact the original petitioner if ultimately the company is wound up. In that case, it is likely that the original petitioner will have to repay any monies received in satisfaction of the original petition debt (s127 Insolvency Act 1986 applies).