Validation Orders
After Winding Up Petitions

A validation order is a court order that validates (makes legal) certain transactions or payments made by a company after a winding up petition has been presented against it. Under UK insolvency law, once a winding up petition is filed, any dispositions of company property are automatically void unless validated by the court.

You need a validation order when:

• A winding up petition has been filed against your company
• You need to make essential business payments (wages, rent, utilities)
• You want to continue trading while defending the petition
• You need to pay suppliers or receive customer payments
• You're negotiating a settlement or payment plan

⚠️ Without a validation order, any payments made could be recovered by a liquidator, putting directors at personal risk.

The timeframe for obtaining a validation order depends on several factors:

Factors affecting timing:

• Complexity of the company's financial situation
• Whether the petitioning creditor objects
• Quality and completeness of supporting evidence
• Court availability and scheduling
• Whether urgent interim relief is needed

🚨 Time is critical - apply as soon as possible after the petition is served to avoid business disruption.

The costs of obtaining a validation order typically include:

✅ Remember: The cost of a validation order is often much less than the consequences of not having one.

No, you should not continue trading without a validation order. Here's why:

Limited exceptions (high risk):

• Small payments in the ordinary course of business
• Payments that benefit all creditors
• Payments made in good faith without knowledge of the petition

🔥 Emergency tip: If you need to make urgent payments before getting the order, document everything and seek immediate legal advice.

A successful validation order application requires comprehensive evidence. The court needs to be satisfied that the proposed transactions will benefit creditors or are in the company's best interests.

💼 Professional tip: Work with experienced insolvency practitioners who know exactly what evidence the court requires for approval.

If the court refuses your validation order application, you face several immediate challenges and limited options:

💡 Prevention is better than cure: Work with experienced professionals to ensure your application has the best chance of success from the start.

Prevention is always better than cure. Here are proven strategies to avoid winding up petitions and the need for validation orders:

🎯 Remember: The cost of prevention is always less than the cost of crisis management. Invest in professional financial management and early intervention.