When faced with a winding up petition any disposition of the company’s assets is potentially void unless the permission of the Court is obtained. The Insolvency Act 1986, section 127 voids the disposition of assets from the commencement of the winding up.
The has the potential to stop the company in its tracks and cause all trading to cease.
In order to ensure that regular payments being made by the company are not to be treated as void (and potentially recoverable from the directors by a future Liquidator) a Validation Order needs to be obtained from the court.
The appropriate application needs to be made in a timely manner to the Chancery Division with full supporting evidence.