Reading Football Club has been hit with a winding-up petition by former chief executive Nigel Howe, according to reports from The Telegraph. The Reading FC winding up petition, which seeks to force the League One club into compulsory liquidation, comes less than seven months after the club was taken over by new American owners.
The Reading winding up case highlights how quickly creditor disputes can escalate to formal liquidation proceedings. While the club denies the claims and confirms it’s in an active dispute with Nigel Howe, the situation offers important lessons for company directors about creditor action, legal disputes, and the serious consequences of unresolved business debts.
What Is a Winding-Up Petition?
A winding-up petition is a serious legal step used by creditors to force a company into compulsory liquidation when it has been unable to pay back debts. It’s typically issued by a creditor who is owed more than £750 and hasn’t been paid for at least 21 days, despite repeated requests.
In Reading FC’s case, Mr Howe has reportedly obtained a County Court Judgment claiming he’s owed almost £100,000. This CCJ is a critical step — it proves the debt exists in the eyes of the law, making it much easier to justify a winding-up petition.
Once a petition is issued, the company has just seven days before it’s advertised in The Gazette. After advertisement, the company’s bank accounts are typically frozen, making it virtually impossible to trade. A court hearing follows roughly four to eight weeks later, where a judge will decide whether to wind up the company.
Why Would Nigel Howe Take This Action?
The details of the dispute between Reading FC and Nigel Howe haven’t been made public, but winding-up petitions are rarely the first option creditors choose. They’re expensive, public, and uncertain.
Nigel Howe, a property developer who worked with previous owner Dai Yongge to oversee the club’s sale, has reportedly obtained a County Court Judgment for almost £100,000. This suggests negotiations to resolve the dispute have already failed.
Most creditors prefer to negotiate payment, agree a settlement, or pursue less dramatic debt recovery methods. When someone proceeds to a winding-up petition despite these alternatives, it usually indicates:
- Previous negotiations have failed completely.
- The creditor believes they won’t be paid voluntarily.
- There’s a breakdown of trust or relationship.
- The creditor wants to force immediate action.
For directors in similar positions, this is the warning. Once a creditor relationship deteriorates to this point, stopping the petition becomes far more expensive and difficult than resolving the original dispute.
What Can Reading FC Do Now?
The Reading FC winding up petition puts the club under immediate pressure. The club has seven days from receiving the petition before it’s advertised in The Gazette. This advertisement triggers bank account freezing and makes the situation significantly harder to resolve.
Options moving forward include:
1. Pay the Debt in Full
If the club can pay what’s owed (or what the court determines is owed), the petition can be withdrawn. But with reported debts of nearly £100,000, plus legal costs, this isn’t a small sum for a League One club already under financial pressure.
However, even paying the original debt doesn’t guarantee the petition disappears. Other creditors may take over the petition through a process called “change of carriage”, forcing the club to address multiple debts simultaneously.
2. Reach a Settlement
Mr Howe’s legal representative has stated his client “very much hopes for an amicable settlement with Reading FC soon.” This suggests there’s still room for negotiation. A credible settlement offer, backed by realistic payment terms, might persuade Mr Howe to withdraw the petition.
3. Challenge the Debt in Court
Reading FC states it “denies any claims made against it.” If the club believes the debt isn’t valid, it can dispute the petition at the court hearing. Common grounds for successfully challenging a winding-up petition include:
- Exaggerated Figures: The amount claimed is higher than the actual debt owed.
- Disputed Debt: The company disagrees with the creditor’s claim.
- Lack of Proper Notice: Insufficient warning was given before the petition was issued.
- Failure to Follow Procedure: The creditor didn’t adhere to legal requirements when filing.
- Unnecessarily Limiting Time: The creditor didn’t allow reasonable time for payment.
However, Mr Howe reportedly already has a County Court Judgment, which proves the debt does legally exist to some extent. This makes challenging the petition significantly harder as you need overwhelming and substantial evidence to succeed.
4. Enter a Formal Insolvency Process Voluntarily
If the club’s financial position is genuinely unsustainable, directors might consider a Creditors’ Voluntary Liquidation (CVL) or administration. This allows them to control the process rather than having compulsory liquidation imposed by the court.
The critical factor is time. The club has just seven days from receiving the petition before it’s advertised in The Gazette. Once advertised, banks freeze accounts and suppliers withdraw credit terms. The pressure intensifies rapidly, and many of the rescue options (CVA, administration, etc.) are no longer available after advertisement.
What This Means for Company Directors
The Reading FC winding up petition demonstrates how director disputes, unpaid executive agreements, and unresolved creditor claims can escalate into existential threats to a business.
If you’re a company director facing similar creditor pressure, these lessons from the Reading winding up case matter:
Act Before the CCJ
Once a creditor obtains a County Court Judgment against your company, your options narrow significantly. The debt is legally proven, making it much harder to challenge later. If you’re in dispute with a creditor, seek professional advice before it reaches this stage.
Don’t Assume Payment Solves Everything
Paying the original debt doesn’t guarantee the petition disappears. Once a petition is issued, other creditors may take over through a “change of carriage. This process forces you to address multiple debts simultaneously and can devastate cash flow even if you could afford to pay the original creditor.
Don’t Assume Negotiation is Always Possible
Some creditors, particularly individuals or smaller businesses who feel they’ve been wronged, may proceed to formal action even when it’s not in their financial interests. Emotional factors, perceived injustice, and relationship breakdowns drive decisions that pure economics wouldn’t support.
Bank Account Freezing Happens Post-Advertisement
Many directors don’t realise that once a winding-up petition is advertised in The Gazette, banks automatically freeze company accounts. You can’t pay wages, suppliers, or even the legal fees needed to defend the petition. This is why acting within that seven-day window is essential.
The reason banks freeze accounts is simple: once a winding-up petition is issued, you’re legally not allowed to diminish company assets. This includes making payments to yourself, settling with other creditors not named on the petition (known as preference payments), or selling company assets. Any of these actions could make you personally liable for repayments.
Defending a Petition is Expensive
Even if you believe the debt is invalid, defending a winding-up petition requires legal representation and often costs tens of thousands of pounds. If you’re already under financial pressure, this additional expense can be impossible to fund.
Public Damage Happens Fast
Reading FC’s situation is now national news. For most companies, a winding-up petition might not make The Telegraph, but it will appear in The Gazette, which credit reference agencies monitor. Suppliers, customers, and employees will all likely see it, and the reputational damage often forces closure even before the court hearing.
Even if you successfully defend or pay off the petition, future lenders may be wary of providing credit. They might insist on stricter terms, personal guarantees, or rigid repayment schedules because they’ve seen that you faced a winding-up petition before.
When to Consider Voluntary Action
For Reading FC, the new owners took control only seven months ago, following years of financial mismanagement under previous ownership. They inherited a difficult situation, which makes the current petition even more concerning for supporters.
For directors in similar positions — where you’ve inherited problems, or where creditor pressure is mounting despite your best efforts — voluntary insolvency processes can offer more control and often better outcomes than waiting for compulsory liquidation.
Creditors’ Voluntary Liquidation (CVL) allows directors to close an insolvent company in an orderly way, protecting themselves from accusations of wrongful trading while ensuring creditors are treated fairly according to the legal priority order.
Once a company is insolvent, directors’ duties shift: you must prioritise creditor interests over shareholder interests, and continuing to trade while insolvent can expose you to personal liability.
Company Voluntary Arrangement (CVA) can rescue a viable business by agreeing reduced payments with creditors over time, typically spread over several years through one monthly payment. CVAs provide immediate protection from legal action, including winding-up petitions, and allow directors to retain control while restructuring debt.
However, CVAs require creditor approval and are no longer an option once the petition has been advertised in The Gazette.
Administration provides breathing space to restructure or sell the business as a going concern. During administration, the company is temporarily protected from creditors, including winding-up petitions, while an appointed administrator reviews the financial situation and develops a strategy.
However, like CVAs, administration is no longer an option once the petition has been advertised in The Gazette. The administrator’s primary focus is facilitating repayment to creditors, which means debt repayment takes priority over protecting the company’s interests.
The key advantage of voluntary action is control. Directors choose the process, the timing, and the licensed insolvency practitioner who will handle it. In compulsory liquidation, the court appoints the liquidator and directors have minimal influence over what happens next.
What Should Directors Do If Facing a Winding-Up Petition?
If your company has been threatened with, or has received, a winding-up petition:
- Seek Immediate Professional Advice: Licensed insolvency practitioners can assess your options, negotiate with creditors, and help you understand the realistic outcomes. Time is critical. Waiting reduces your options significantly.
- Don’t Ignore It: Some directors hope petitions will go away or assume the creditor is bluffing. They rarely are. Once proceedings start, they follow a fixed legal timetable that doesn’t stop unless action is taken. You have just seven days before advertisement in The Gazette, then four to eight weeks until the court hearing.
- Honestly Review Your Financial Position: Can you actually pay this debt and continue trading? If not, what are the alternatives? Insolvency practitioners can help you model different scenarios and understand the consequences of each option.
- Consider Your Directorial Duties: Once a company is insolvent, your duties shift. You must prioritise creditor interests over shareholder interests, and continuing to trade while insolvent can expose you to personal liability for wrongful trading. Professional advice helps you navigate these legal obligations.
- Communicate with Stakeholders Carefully: What you say to employees, suppliers, and customers matters. Premature disclosure can accelerate the crisis, but hiding serious problems can worsen the eventual outcome. Get advice on what to say, when to say it, and to who to say it to.
The Broader Context: Football Clubs and Financial Distress
The Reading FC winding up petition situation follows years of financial problems under previous owner Dai Yongge, including 18 points worth of deductions, transfer embargoes, and the collapse of the women’s team. The club’s supporters had celebrated the May takeover as the end of uncertainty.
The Nigel Howe petition shows how legacy issues can persist, even after changes in ownership. For company directors, it’s a reminder that acquiring distressed businesses brings hidden liabilities that aren’t always clear during due diligence.
For directors of companies in ongoing financial difficulty, the lesson is different: problems rarely resolve themselves. Early professional intervention creates options. Waiting until formal legal action begins removes most of those options and significantly increases costs.
Get Expert Advice Before Options Narrow
As is the case with Reading FC, winding-up petitions move quickly. In fact, the gap between issue and bank account freezing can be as little as seven days. The gap between advertisement and court hearing is typically four to eight weeks.
If your company is facing creditor pressure, unresolved disputes, or mounting debts, don’t wait until formal action begins. A confidential discussion with a licensed insolvency practitioner can help you understand your position, explore alternatives, and act while you still have choices.
Inquesta is a Manchester-based insolvency practice led by Steven Wiseglass, a licensed insolvency practitioner with over 20 years of experience helping company directors navigate creditor pressure and financial distress. We provide clear, practical advice on your options: whether that’s negotiating with creditors, restructuring your business, or closing down in a controlled way that protects your interests.
If you’re concerned about winding-up petitions, creditor action, or your company’s financial position, contact us for a confidential, no-obligation conversation about your situation.
The content of this article is based on information available as of 18 December 2025 and may be subject to change.