Financial sector company wound-up

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London Capital Marketing Ltd, a company operating in the financial sector, has been wound up following a petition presented by a connected company on the basis that it was unable to pay its debts as they fall due.

Interestingly, although the petitioner and the respondent were connected companies, a dispute had arisen over non-payment of a debt created by unpaid inter-company loans. The petitioner was in administration and the petition debt amounted to just over £400,000.

The respondent asserted that it was contractually entitled to the sum claimed pursuant to an agreement where it had acted as a distribution agent. The petitioner was successful in establishing that the petition sum had been paid to the respondent, but not repaid. However, the respondent had suffered difficulties in obtaining evidence to support its case and the petitioner’s administrators had also failed to identify any relevant documents despite the respondent’s documents being kept at the petitioner’s office.

Although the respondent disputed the debt, the sole director should have been able to at least identify the documents, their location, or explain his lack of such knowledge. He could not and therefore the respondent was capable of only genuinely disputing a small portion of the petition debt and was ultimately wound up on the basis it was unable to pay its debts as they fell due.

LONDON CAPITAL & FINANCE PLC (In Administration) v LONDON CAPITAL MARKETING LTD [2020] EWHC 2028 (Ch)

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