Avoiding winding up

In this case, Metapol’s solicitors went against Electrosteel by threatening to present a winding up petition unless the sum of £264,091.05 was paid.

Electrosteel made an application to restrain Metalpol of presenting the petition on the basis that its equitable set off or cross clams exceeded the amount claimed by Metalpol. Electrosteel argued that a director within the company, Mr Radford, deliberately concealed his interest and shareholding Metalpol, which gave rise to a number of claims for breach of fiduciary duty. However, Electrosteel’s claims were required to be established against Metalpol, not Mr Radford.

Electrosteel was found to have realistic prospects of establishing a claim against Metalpol for dishonest assistance, and also in establishing that Mr Radford was a de facto director of Metalpol. The court found these claims against Metalpol realistic under a breach of contract, a claim for secret commissions on the basis of knowing receipt of monies in fiduciary duty and Metalpol’s guarantee liability to Electrosteel. The court rejected the claim from Electrosteel on Mr Radford for salary and expenses, on the basis that whilst it may be possible for there to be such a claim against Mr Radford, it could not be attributed to Metapol.

The amount of claims put forward by Electrosteel permitted by the court did not exceed the amount claimed by Metalpol, so the application to restrain the presentation of the winding up petition was refused.

For more information, help or advice please contact the Restructuring & Insolvency team.