Freezing orders are used to prevent business assets from being disposed of, or ‘hidden,’ by a debtor before court judgement can be enforced. A creditor who has applied for a freezing order, or Mareva Injunction as it is also known, must have good reason and be able to present a solid case to the courts.
The applicant must also give an undertaking to pay damages to the debtor should it later be found that the freezing order was incorrectly granted. If one of your creditors has applied for an order to freeze company assets, it is unlikely they have taken this action lightly. Applicants must meet strict conditions, and risk financial loss if they make a mistake.
Various types of asset can be included in a freezing order, but it is often specific assets that are frozen, or certain assets to the value of the debt. In some cases freezing orders cover all the assets of a company, including property, land, vehicles, and company shares.
Any assets not included in the injunction can be dealt with in the normal way, but you must be careful to ensure the company has enough assets to meet the value of a ‘maximum sum’ order which covers at least the value of the claim.
To obtain a freezing order, your creditor must have a ‘substantive cause of action’ and a good, arguable case that can be backed up with solid evidence. They may have made numerous attempts to collect their debt, and faced with non-payment or non-response, fear that you will take aversive action to prevent business assets from being sold.
A freezing order is likely to immediately precede or run alongside further court action, and can be issued ‘with notice’ or ‘without notice.’ Even a ‘with notice’ injunction leaves the time available to deal with this situation very limited, and you will need to take action immediately.
You may or may not have received notice of the application - a freezing order ‘without notice’ leaves you very little time to prepare. You will need to comply with the court’s requests, which might include providing a detailed list of company assets, or possibly gathering together other financial information.
You will be informed of a ‘return date’ hearing which you should attend, but if more time is needed to prepare, you may be able to request that the hearing is moved to a later date. In the meantime you must not deal with the assets in question, as doing so will place you in contempt of court.
It’s advisable to seek professional guidance as soon as possible so that you understand your obligations. A penal notice is included on the front page of a freezing injunction, and this means that you could face prison if you deal with the assets stated, or ignore court instructions.
Real Business Rescue has a highly experienced team of insolvency experts ready to help. We can guide you on the best immediate action to take, and look at the options for your business in the longer term.
As soon as we were appointed administrators we worked hard to find a new buyer for the business, which has continued to trade throughout this period. “After receiving enquiries from a number of interested parties, we are delighted to have found a buyer in such a short space of time, helping to protect the local economy and also a significant number of jobs. “Ted & Muffy is going back to its roots and we are confident Duo Bootmakers Ltd, which wants to develop its specialist offering, will be perfectly positioned to help build a more financially robust future for the business.Read the Case Study View all Case Studies
Friday 2nd December, 2016 Written by Keith Tully
If your business goods have been seized by a government agency such as HMRC or Border Force, read our guide on seized goods letters for company directors.Learn More…
Thursday 25th August, 2016 Written by Keith Tully
The construction industry remains in crisis this summer as the number of insolvencies continues at the highest level of all UK sectors.Learn More…
Thursday 25th August, 2016 Written by Keith Tully
Figures from the Insolvency Service show that in 2015 the construction industry suffered the highest number of insolvencies in England and Wales, with the wholesale and retail trade coming a close second.Learn More…
20th September 2017 Confidence among the UK’s small businesses has slumped to the lowest levels recorded since the immediate aftermath of the 2016 Brexit referendum.
13th September 2017 The public relations (PR) and communications company Bell Pottinger has fallen into administration in the UK following its involvement in a highly controversial campaign for a billionaire family in So
5th September 2017 At least two players for Manchester United are reportedly being probed by HMRC as part of a wider investigation into tax planning arrangements common within the football industry.
4th September 2017 Confidence among British companies slid back during August to a level not seen for 12 months, according to a recent survey.
30th August 2017 Big businesses from across the UK are estimated to have potentially underpaid their taxes to a value close to £25 billion.
Every day we help companies just like yours turn things around against seemingly impossible odds, regardless of your situation we can help. Find your nearest office today.