O’Neill v Hudner [2025] IEHC 669: Just and Equitable Winding‑Up of a Near‑Insolvent Start‑Up and the Limits of the “Clean Hands” Bar

1. Introduction

This High Court decision by Quinn J in O’Neill v Hudner concerns the winding up of SULU Software Consultancy Limited (“SULU” or “the Company”), a crypto‑related software start‑up founded in 2022 by the petitioner, Susan O’Neill, the respondent, Luke Hudner, and a third founder.

The case sits at the intersection of three important strands of Irish company law:

the scope of the court’s “just and equitable” jurisdiction under s.569(1)(e) of the Companies Act 2014;
the emerging statutory “creditor‑duty” of directors under s.224A in the zone of insolvency; and
the equitable “clean hands” limitation in petitions where there are allegations of shareholder misconduct, particularly in the shadow of ongoing oppression proceedings under s.212.

The Company was effectively moribund: it had almost no trading activity, no employees, minimal assets, and was, by common ground, on the cusp of insolvency. A special resolution to wind up voluntarily was supported by all shareholders except the respondent, whose 25.31% stake allowed him to block the resolution. The petitioner, as a contributory, therefore sought a compulsory winding‑up order on the “just and equitable” ground.

The respondent did not contest that the court possessed a wide discretion to wind up under s.569(1)(e), nor that the company was near insolvency. Instead, he argued that equitable principles should lead the court to refuse the order because of alleged misconduct by the petitioner, and because, he said, the real goal of the petition was to stymie his pending s.212 oppression claim.

This judgment is important because it:

applies the “just and equitable” jurisdiction to a near‑insolvent tech start‑up with a blocked voluntary liquidation,
clarifies the weight to be given to alleged misconduct (the “clean hands” doctrine) when a contributory seeks winding up, and
integrates the new s.224A creditor‑duty into the equitable balancing exercise under s.569(1)(e).

2. Summary of the Judgment

Quinn J granted the petition and ordered that SULU be wound up under s.569(1)(e) on the “just and equitable” ground, appointing Mr Colin Gaynor as liquidator.

Key conclusions include:

The company was on the brink of insolvency, with no realistic prospect of avoiding it. It had no employees, negligible trading, and would exhaust its cash within months (paras 3–4, 10–13, 50–51).
There had been an irretrievable breakdown in relations between two of the three principal founders (petitioner and respondent), with the respondent explicitly stating he no longer wished to have any dealings with the company (para 9).
All other shareholders (including investors) supported a voluntary winding up which was blocked solely by the respondent (para 7, 54).
The case displayed elements of three classic “just and equitable” categories—quasi‑partnership breakdown, deadlock, and failure of substratum—but the court reaffirmed that these are illustrative only and the jurisdiction remains broadly discretionary (paras 35, 52–56).
The respondent’s allegations of inequitable conduct (share acquisition on resignation, removal of non‑compete clauses, and establishment of a new start‑up by the petitioner) did not constitute sufficient misconduct to bar relief on clean‑hands or equitable grounds (paras 57–63).
Under s.602, any transfer of the respondent’s shares after presentation of the petition would be void if the company were wound up, so his shareholder status would be restored (para 19, 66).
The existence of pending s.212 oppression proceedings did not render the winding‑up petition abusive or preclude the order; those proceedings could, in some form, continue at least against the petitioner personally (paras 16–17, 67).
As a director, the respondent had obligations under s.224A once the company was in the “zone of insolvency”; his stance of opposing liquidation while proposing no viable plan for the company weighed against him (para 68).

On that basis, with no realistic alternative and the company on the verge of insolvency, the court held that it was “just and equitable” to wind up SULU (paras 49–52, 71–72).

3. Factual Background

3.1 The Start‑Up and its Capital Structure

SULU Software Consultancy Limited was incorporated on 13 July 2022 to develop software solutions enabling companies to leverage cryptocurrency and technologies such as the Lightning network (para 7). The company’s name itself reflects the combination of the founders’ first names, illustrating the personal and collaborative nature of the venture.

At the time the petition was presented:

The petitioner, Ms O’Neill, was CEO, director and shareholder with 41.33% of the shares.
The respondent, Mr Hudner, was director and shareholder with 25.31% of the shares.
A third individual was also a director and founder.

The capital structure allowed the respondent to block any special resolution (which requires a 75% majority), and he did in fact block a special resolution to voluntarily wind up the company at an EGM on 19 May 2025 (para 7).

3.2 Operational and Financial Position

The company was always in early‑stage start‑up mode and generated only €2,484 in profit throughout its life (para 10). By late 2025, it was essentially non‑trading, with:

no employees,
monthly revenue of approximately €700,
cash of just under €65,000, and
0.039 Bitcoin valued at under €4,000 (para 12).

Against this, the company had five creditors and monthly costs of €12,000 (excluding legal and accounting fees) (para 12). Its systems were vulnerable to cyberattack due to the absence of any full‑time staff (para 12). Two of the founders performed minimal “caretaker‑type” work without pay (para 10).

Crucially, the company had been unable to raise any funds since 6 August 2024, in large part because the respondent, a founder and director, had initiated s.212 oppression proceedings in November 2024 (paras 4, 11, 14). The parties agreed that SULU was on the cusp of insolvency (paras 3, 10, 13).

3.3 Breakdown of Relations and Leaver Provisions

The relationship between petitioner and respondent broke down irretrievably. The respondent went on sick leave in summer 2024 and never returned; he later resigned his employment in July 2025, after the winding‑up petition had been presented (para 9, 17). In his affidavits he made clear that he did not wish to have any further business dealings with the company (para 9).

This resignation triggered “leaver” provisions in the company’s constitution and shareholders’ agreement. Under those provisions:

The respondent was treated as a “Bad Leaver” by virtue of his resignation, allowing his shares to be acquired for nominal value by other shareholders—here, the petitioner (para 17).
The respondent claims his resignation was effectively a constructive dismissal and has lodged an unfair dismissal claim before the WRC; success there would reclassify him as a “Good Leaver”, altering the price, not the fact, of the share transfer (para 17–18).

The petitioner contended in any event that the fair value of the shares was nominal given the company’s lack of patents, IP rights or technical assets and its dire financial condition (para 18).

3.4 Removal of Non‑Compete Clauses and New Start‑Up

By March 2025, the company’s financial prospects were already poor. A resolution, supported by all shareholders except the respondent, released the founders (including the respondent) from their non‑compete clauses (paras 11, 58). Board minutes record that this decision was taken “in consideration of the financial position and poor future prospects of the Company” (para 11).

Subsequently, the petitioner became involved in a new start‑up which did not include the respondent (para 5(iii), 39, 59). The respondent alleged that this, together with the share acquisition and the removal of non‑competes, amounted to misconduct disentitling the petitioner to equitable relief.

3.5 The Oppression Proceedings and the Petition

On 25 November 2024, the respondent issued s.212 Companies Act proceedings (“Oppression Proceedings”) against the company and the petitioner personally, alleging oppression and seeking, in substance, to have his shares bought out (paras 4, 10, 14, 65).

On 12 June 2025, the petitioner, as a contributory, presented a winding‑up petition under s.569(1)(e) on the “just and equitable” ground (para 1, 14). The petition came into the Chancery 2 list on 14 July 2025, when the respondent initially indicated he was not opposing it (para 14). It was later opposed on equitable grounds based on alleged misconduct and alleged abuse of process (paras 5–6, 41–48).

There was no challenge to the form, service, advertisement, or technical compliance of the petition (para 15), nor any challenge to the suitability of the proposed liquidator (para 14).

4. Legal Framework

4.1 The Core Statutory Provisions

(a) Section 569(1)(e) – “Just and Equitable” Winding Up

Section 569(1) of the Companies Act 2014 lists the grounds on which a company may be wound up by the court. The relevant ground here is s.569(1)(e):

“if the court is of the opinion that it is just and equitable that the company should be wound up” (para 22).

This is a broad, discretionary jurisdiction. As noted by Collins J in Re Lanskey Ltd, and approved in this judgment, the court should not seek to restrict it by rigid categories; decided cases simply provide illustrations (para 24–26).

(b) Section 224A – Directors’ Duties in the “Zone of Insolvency”

Section 224A, inserted by the European Union (Preventive Restructuring) Regulations 2022, requires a director who believes, or has reasonable cause to believe, that the company is, or is likely to be, unable to pay its debts to have regard to:

the interests of creditors,
the need to take steps to avoid insolvency, and
the need to avoid deliberate or grossly negligent conduct that threatens the viability of the business (para 21).

This statutory duty is owed to the company and is enforceable as a fiduciary duty (s.224A(2)). Quinn J uses this provision in assessing the respondent’s stance as director when the company was near insolvency (para 68).

(c) Section 602 – Voidance of Dispositions After Commencement of Winding Up

Section 602 provides that any transfer of shares or alteration in the status of members, made after the commencement of a winding up, is void unless sanctioned by the liquidator or (in some cases) a director (para 23).

The petitioner accepted that if the winding‑up order were made, s.602 would render void her acquisition of the respondent’s shares which took place after the petition was presented, thus restoring those shares to the respondent (para 19, 66).

4.2 The “Just and Equitable” Categories and Courtney’s Sixfold Scheme

Courtney’s The Law of Companies (4th ed.) identifies six typical categories where the “just and equitable” ground has been used (para 30):

Quasi‑partnership cases;
Deadlock in corporate management;
Failure of substratum;
Illegal objects;
Corporate instruments of fraud; and
Public interest.

However, Courtney himself and the authorities stress that these are illustrative. The jurisdiction remains dynamic and fact‑dependent (para 31). Quinn J expressly endorses this, relying on Re Lanskey and Ebrahimi to reaffirm that categorisation must not narrow the statutory words “just and equitable” (paras 24, 31, 52).

5. Precedents Cited and Their Influence

5.1 Re Lanskey Ltd [2022] IECA 34

Re Lanskey concerned a company where the relationship between two major shareholders (60:40) had irretrievably broken down, leading to deadlock and effective cessation of the company’s functioning. The Court of Appeal upheld a “just and equitable” winding‑up order.

Collins J made two key points emphasised by Quinn J:

Broad scope of s.569(1)(e): it should not be narrowed by reference to illustrative categories (para 24–26).
“Last resort” principle: even accepting winding up is an option of last resort, it may be appropriate where there is no adequate or satisfactory alternative remedy—e.g. where a buy‑out is unrealistic or unworkable (para 24, esp. 27).

Quinn J adopts this approach: he accepts that winding up should be a last resort but holds that there was no realistic alternative here—no viable buy‑out, no prospect of new investment, and inevitable insolvency (paras 50–52, 56).

5.2 Re Leech Papers Ltd [2022] IEHC 475

Re Leech Papers (Stack J) also concerned the exercise of the s.569(1)(e) jurisdiction, in a context of shareholder oppression and inadequate records. Stack J reaffirmed that liquidation is “very much a last resort” and should only be used where no other alternative remedy is available (para 25, 60).

Quinn J cites this authority to acknowledge the high threshold for invoking s.569(1)(e), but distinguishes SULU’s situation: given its near‑insolvent status, lack of employees, and inability to trade or fund a liquidator in the future, no realistic alternative remedy (such as a buy‑out or continued trading) existed (paras 49–52, 56).

5.3 Re Kilcurrane Business Centre Ltd [2021] IEHC 701

In Re Kilcurrane, Butler J considered both s.569(1)(d) (inability to pay debts) and s.569(1)(e) (just and equitable). She emphasised:

the discretionary and inherently equitable nature of s.569(1)(e); and
the relevance of a quasi‑partnership relationship and serious misconduct (such as an illegal transfer of the company’s debt) in tipping the balance towards winding up (paras 26, 49–50, 53–54).

Quinn J borrows from this approach in two ways:

He emphasises discretion and the need to base the court’s “opinion” on evidence (para 26, 50).
He notes that a quasi‑partnership background and breakdown in relations can justify winding‑up, especially when combined with other factors (here, insolvency and deadlock) (para 26, 52–56).

However, unlike Kilcurrane, the decisive additional factor in SULU is not an illegal transaction but the imminence of insolvency and the lack of any realistic survival strategy.

5.4 Ebrahimi v Westbourne Galleries Ltd [1973] AC 360

Ebrahimi is the foundational House of Lords authority for “just and equitable” winding up in quasi‑partnership contexts. Lord Wilberforce explained that:

Company law must sometimes recognise equitable considerations arising from personal relationships and mutual confidence behind the corporate structure.
The “just and equitable” words allow the court to subject strict legal rights to such equitable considerations (paras 27–28).
The jurisdiction should not be constrained by fixed categories, nor limited to matters affecting the petitioner only in his formal capacity as shareholder (para 28).

Of particular importance in this case is Lord Cross’s observation (quoted by Quinn J):

“A petitioner who relies on the ‘just and equitable’ clause must come to court with clean hands, and if the breakdown in confidence between him and the other parties to the dispute appears to have been due to his misconduct he cannot insist on the company being wound up if they wish it to continue.” (para 29, 42)

The respondent placed heavy reliance on this “clean hands” principle. Quinn J accepts the relevance of equitable conduct, but, as discussed below, concludes that the petitioner’s conduct does not reach the level that would disentitle her to relief (paras 57–63).

5.5 Other Authorities and Academic Commentary

The judgment also refers to:

Re Murph’s Restaurant Ltd and Re Vehicle Buildings and Insulations Ltd (via Re Lanskey) for the proposition that breakdown in quasi‑partnerships and deadlock in management can justify winding up (para 24).
Re Fuerta Ltd [2014] IEHC 12 (Charleton J), cited (via Courtney and Re Lanskey) as an example where serious non‑compliance with company law justified winding up, though the judgment in SULU notes that such cases may now be more appropriately brought under s.569(1)(g) (public interest) (para 24, 31).
Courtney’s analysis emphasising that “just and equitable” is a dynamic jurisdiction not confined to any closed set of circumstances (paras 24, 30–31, 52).

6. Analysis of the Court’s Legal Reasoning

6.1 Characterising SULU: Elements of Quasi‑Partnership, Deadlock and Failure of Substratum

The petitioner argued, and Quinn J accepted, that the case exhibited key features from three of Courtney’s categories (para 33–34, 52–56):

Quasi‑partnership: Although the shareholdings were not equal, SULU was a small start‑up formed by a small group of founders on the basis of mutual trust and confidence. The breakdown of that relationship was undisputed (paras 7, 9, 34(A), 53).
Deadlock: There was no “classic” 50:50 deadlock, but there was a functional deadlock regarding a critical decision—the voluntary winding up of the company. All shareholders except the respondent wished to wind up; his blocking stake prevented that course (para 7, 34(B), 54).
Failure of substratum: The company could no longer pursue the purpose for which it had been formed due to lack of funding and the breakdown in relationships. The original venture had stalled and was not being actively pursued (para 34(C), 55).

Quinn J emphasises that, while the facts do not fit perfectly within any single category, the combination of these factors—taken with the company’s near insolvency—engages the broad “just and equitable” jurisdiction (paras 35, 52, 56).

6.2 Centrality of Imminent Insolvency

The imminent insolvency of SULU is the court’s principal reason for granting the order (paras 3, 10, 13, 50–51):

The company was not yet technically “unable to pay its debts” within the meaning of the statutory insolvency tests, but it would run out of funds within months, and there was “no plausible prospect” that this could be avoided (para 50).
Refusing the petition would create an “unsatisfactory situation”: the company would drift into insolvency with no resources left to fund a proper liquidation, complicating the protection of creditors and the orderly winding down of affairs (para 51).

This is an important nuance: rather than relying on the separate ground of insolvency in s.569(1)(d), the court treats impending insolvency as a powerful factor within the equitable evaluation under s.569(1)(e). It confirms that the “just and equitable” ground can appropriately be used pre‑insolvency where:

Insolvency is clearly imminent and unavoidable; and
Delaying formal liquidation would prejudice the interests of creditors and orderly administration.

6.3 Winding Up as “Last Resort” and Absence of Alternatives

Quinn J accepts the principle that winding up on the “just and equitable” ground is a last resort, citing Re Lanskey, Re Leech Papers and Re Fuerta (paras 24–25, 50, 56). The judgment carefully tests whether any adequate alternative existed:

Buy‑out of the petitioner? Unfeasible: the company had almost no value, funding was unavailable, and the respondent’s own stance (seeking his shares to be bought out) meant he was not proposing to purchase others’ shares (para 24, 65).
Continuation of trading? Unrealistic: the company had no employees, minimal revenue, and no credible path to new investment (paras 10–13, 50–51, 56).
Waiting for insolvency? Inappropriate: to allow the company simply to drift into insolvency with no liquidator funding would be irresponsible and contrary to the emerging creditor‑orientation in the zone of insolvency (paras 51, 68).

On this analysis, the court concludes that no “adequate or satisfactory alternative remedy” is available, and so it is appropriate to “reach for the ‘option of last resort’” (para 24, 50–52).

6.4 The Equitable “Conduct Issues” and the Clean‑Hands Principle

The respondent’s main defence was not jurisdictional but equitable: he argued that the petitioner’s conduct was such that the court should refuse to exercise its discretion to wind up, specifically relying on Lord Cross’s “clean hands” dictum in Ebrahimi (paras 41–42).

Quinn J addresses each conduct allegation in turn (paras 57–63).

(a) Removal of Non‑Compete Clauses

The respondent complained that the petitioner was part of a plan to remove non‑compete clauses from founders’ contracts, allowing them to set up a competing venture. Quinn J found:

The decision was taken when the company was rapidly running out of cash.
It was supported by all other shareholders, including investors; the respondent was treated in the same way as the other founders.
The rationale—to allow founders to pursue other work in light of the company’s poor prospects—was “appropriate” and not unconscionable.
The process was transparent and properly notified (para 58).

He therefore rejects the suggestion that this conduct disentitles the petitioner to relief.

(b) Establishment of a New Start‑Up

The petitioner later engaged in a new start‑up that did not include the respondent. Quinn J notes:

The respondent must have understood, when non‑competes were lifted in March 2025, that founders might start new ventures (para 59).
The respondent himself had made clear that he did not wish to work with the petitioner or the company again (para 9, 59).
There was no evidence that any IP, patents or other property of SULU had been misappropriated (para 61).
Any such allegation could in any event be investigated by the liquidator (para 61).

Accordingly, this conduct is not “obviously unconscionable” and does not bar relief (para 59–61).

(c) Acquisition of the Respondent’s Shares

The petitioner acquired the respondent’s shares as a result of his resignation triggering “Bad Leaver” provisions. The court finds:

The mechanism was dictated by the company’s constitution and shareholders’ agreement, which the respondent had entered into (para 17, 62).
The respondent “ought to have known” that resigning would trigger this outcome (para 63).
The only real issue is pricing (Good vs Bad Leaver), but given the company’s near‑zero value (accepted by the respondent’s counsel), the practical difference would be marginal (para 64).
Importantly, in the oppression proceedings, the respondent had not sought to buy out the petitioner but to have his own shares bought out; thus, the outcome of his shares being acquired is aligned with his own chosen remedy, not manufactured by the petitioner (para 65).
Any perceived unfairness is mitigated by s.602, which will void the share transfer upon winding up and restore his shareholding (para 66).

Taken together, Quinn J is “not satisfied” that these conduct issues, viewed in their undisputed factual context and in the context of the company as a whole, justify refusing relief (paras 57–61, 63–66).

This is a significant clarification of the “clean hands” limitation: misconduct must be sufficiently serious, causative, and inequitable in context before it bars a contributory from obtaining a “just and equitable” winding up. Ordinary commercial manoeuvring in a failing start‑up—especially where transparent, contract‑based, and widely supported—will not suffice.

6.5 Alleged Abuse of Process and the Parallel Oppression Proceedings

The respondent also contended that the petition’s real purpose was to frustrate his oppression claim. The court considers:

Initial comments by counsel for the petitioner indicating that a winding‑up order would “inevitably” end the oppression proceedings (para 16), later refined to acknowledge that, at least against the petitioner personally, some form of proceedings would likely continue (para 16, 67).
The fact that D&O insurance monies received by the petitioner had been paid into the company’s account; the liquidator can review whether any asset has been wrongfully removed (para 4, 67).
The absence of clear evidence that the petition was launched for the collateral purpose of defeating the oppression claim (para 67).

On this basis, the court is “not clear” that the petition is designed to frustrate the oppression proceedings and does not treat this as a bar to relief (para 67). The judgment implicitly accepts that:

the coexistence of s.212 proceedings does not, in itself, prevent a s.569(1)(e) winding‑up order; and
the effect of liquidation on those proceedings is a matter to be worked out in due course, rather than a reason to refuse an otherwise justified petition (para 37, 67).

6.6 Directors’ Duties Under Section 224A and the Zone of Insolvency

A notable feature of this judgment is its explicit reliance on s.224A in the equitable analysis. Quinn J observes that as the company approaches insolvency, directors must “think of creditors” (para 68). He notes:

The respondent is still a director, yet has “no proposals” for how the company should continue to operate if the petition is refused (para 40, 68).
His approach is simply to allow the company to “inevitably” run out of money, at which point there would be no resources to fund a liquidator (para 51, 68).

This is treated as an unsatisfactory position for a director in light of s.224A. The court uses this to weigh the equities against the respondent’s opposition to the petition: once directors are in the zone of insolvency, resisting an orderly winding‑up without any alternative plan may be inconsistent with their statutory obligation to have regard to creditors’ interests.

This is one of the judgment’s most significant contributions: it integrates the new statutory creditor‑duty into the exercise of the “just and equitable” jurisdiction. In future cases, directors opposing a winding‑up petition will likely be expected to demonstrate a credible alternative strategy for protecting creditors and avoiding insolvency.

6.7 Section 602 and Share Transfers After the Petition

Another important technical point is the treatment of share transfers after the presentation of the petition. Quinn J notes:

The petitioner’s purported acquisition of the respondent’s shares occurred after the petition was presented (para 17, 19).
Under s.602, such a transfer is void upon the making of a winding‑up order unless sanctioned by the liquidator or an appropriately empowered director (para 23).
The petitioner accepted that, as a consequence, the respondent’s shares would be “restored” to him (para 19, 66).

This undercuts a major plank of the respondent’s grievance: he had argued that he had been pushed out as a shareholder. But if the company is wound up, he remains a shareholder for the purposes of the liquidation, and any issues about value, misappropriation of assets, or oppression can be investigated in that context.

7. Complex Concepts Simplified

7.1 “Just and Equitable” Winding Up (s.569(1)(e))

This ground allows the High Court to wind up a company where, in its opinion, fairness (“justice”) and overall circumstances (“equity”) require it. It is not confined to technical insolvency or specific statutory breaches.

Typical examples include:

Irretrievable breakdown of trust in a small company built on personal relationships (quasi‑partnership).
Deadlock in management or shareholder decision‑making.
Where the company is no longer able to pursue the purpose for which it was formed (failure of substratum).

The court looks at the broad picture: how the company actually operates, how relationships have evolved, and whether continuing the company is realistic or fair to all stakeholders, including creditors.

7.2 Quasi‑Partnership

A “quasi‑partnership” company is one where, although there is a corporate structure, the parties essentially operate as partners:

they form or continue the company based on personal relationships and mutual confidence;
there is an understanding that they will participate in management; and
there are restrictions on transferring shares, so an excluded member cannot easily exit.

In such companies, a breakdown of trust may justify winding up because the underlying understanding on which the company was formed has collapsed.

7.3 Deadlock

“Deadlock” describes a situation where the company cannot take key decisions because shareholders or directors are evenly or effectively divided. In SULU, there was not a strict 50:50 split, but there was deadlock on the crucial question of whether to wind up voluntarily: all but the respondent favoured liquidation, but his blocking shareholding prevented a special resolution.

7.4 Failure of Substratum

The “substratum” of a company is the basic purpose or venture for which it was formed. Failure of substratum occurs where:

the company no longer pursues that purpose at all; or
it has become impossible or commercially unrealistic to do so.

Here, SULU could no longer pursue its original crypto‑software objectives due to lack of funding, personnel, and the breakdown of relations; it was merely “administering a diminishing concern” (para 34(B)).

7.5 Oppression Proceedings (s.212)

Section 212 allows a member to complain that the company’s affairs are being conducted in a manner oppressive to him/her or in disregard of his/her interests, and to seek personal remedies—such as an order that other shareholders purchase his shares at a fair value.

Winding up is generally seen as more drastic and is, in many oppression cases, a remedy of last resort. In this case, the oppression proceedings and the winding‑up petition proceeded in parallel; the judgment clarifies that the mere existence of such proceedings does not bar a just and equitable winding up.

7.6 “Good Leaver” / “Bad Leaver” Clauses

Shareholders’ agreements and constitutions in start‑ups often classify exits:

Good Leaver: someone leaving in circumstances regarded as acceptable (retirement, redundancy, sometimes constructive dismissal). They may receive fair market value for vested shares.
Bad Leaver: someone who resigns or is dismissed for cause. They may be forced to sell their shares at a heavily discounted or nominal price.

In SULU, the respondent’s resignation made him, in the company’s eyes, a Bad Leaver; if his unfair dismissal claim succeeds, he may be reclassified as a Good Leaver. But in a near‑worthless company, the practical difference in value may be limited (para 17–18, 64).

7.7 Directors’ Duties in the Zone of Insolvency (s.224A)

Once a director believes (or reasonably should believe) that the company is, or is likely to be, unable to pay its debts, s.224A requires the director to:

have regard to the interests of creditors;
take steps to avoid insolvency; and
avoid conduct that threatens the viability of the business.

This shifts the focus from shareholders’ interests to protecting creditors. In practice, it means directors cannot simply “do nothing” and watch the company slide into insolvency; they must either pursue a viable rescue plan or move towards an orderly wind‑up.

7.8 Section 602 – Voidance of Share Transfers After Commencement of Winding Up

Section 602 protects the collective interests of creditors and members by freezing the company’s share and asset structure once a winding‑up commences.

Any transfer of shares or changes in membership status after that point are generally void unless approved by the liquidator. This prevents last‑minute re‑arrangements of ownership that might prejudice creditors or manipulate the outcome of the liquidation.

8. Impact and Significance of the Judgment

8.1 Start‑Ups, Founder Disputes and Winding Up

This case provides clear guidance for Irish start‑ups, particularly in the tech sector where founder disputes and blocked exits are common:

Where a start‑up is effectively defunct—no employees, no realistic trading, no funding—and a special resolution to wind up is blocked by a minority founder, the court is prepared to use s.569(1)(e) to effect a winding up.
The court will look at the commercial reality, not just formal balance sheets: inability to raise funds and impending cash exhaustion are key.
Founders relying on leaver clauses or non‑compete releases must ensure processes are transparent, contractual and non‑discriminatory; if they are, they are unlikely to be viewed as inequitable in a winding‑up context.

8.2 Clarifying the “Clean Hands” Bar in Just and Equitable Petitions

The decision refines the application of the Ebrahimi clean‑hands principle. It confirms that:

Allegations of misconduct must be carefully weighed in context and against undisputed facts.
Conduct that is contractually authorised, transparent, supported by all (or most) shareholders, and not targeted at a particular individual is unlikely to disentitle a petitioner.
The court will distinguish between genuine abuse (e.g., using the company as an instrument of fraud) and hard‑edged but legitimate use of negotiated rights in a failing venture.

This provides greater predictability for litigants: it will be difficult for a respondent simply to point to any perceived unfairness and thereby block a winding‑up petition that is otherwise justified.

8.3 Integration of Section 224A into Equitable Decision‑Making

By explicitly invoking s.224A, the judgment signals that directors’ statutory duties in the zone of insolvency are now part of the court’s equitable calculus when exercising discretion under s.569(1)(e). Practically:

Directors opposing liquidation in a near‑insolvent company will be expected to demonstrate an alternative plan consistent with creditors’ interests.
Passivity—allowing a company simply to run out of cash without planning for an orderly wind‑up—may weigh against those directors in any equitable balancing.

This aligns Irish law with broader European and common‑law trends emphasising creditor protection as companies approach insolvency.

8.4 Relationship Between Winding Up and Oppression Proceedings

The judgment also clarifies the interplay between s.212 oppression proceedings and s.569(1)(e) winding‑up petitions:

The existence of pending oppression proceedings is not, by itself, a barrier to a winding‑up order on “just and equitable” grounds.
Claims that a petition is an abuse of process because it overlaps with or affects oppression proceedings will require clear evidence of a collateral purpose.
Liquidation may affect the form and scope of oppression remedies, but claims—particularly against individuals—may continue and can be worked through with the liquidator’s involvement.

This offers important guidance for litigants who may be considering parallel strategies (personal remedies under s.212 and corporate‑level remedies under s.569).

8.5 Procedural and Evidential Approach

Finally, the case illustrates that:

Winding‑up petitions can be determined on affidavit evidence without cross‑examination where there is a sufficient body of agreed or undisputed facts (para 8–9, 69–71).
Where underlying disputes (e.g., in oppression proceedings) remain unresolved, the court will focus on those facts that are common ground for the purpose of assessing whether a winding‑up order is justified.

9. Conclusion: Key Takeaways

O’Neill v Hudner stands as a significant application and refinement of the “just and equitable” winding‑up jurisdiction in the context of a modern tech start‑up.

The key lessons are:

A start‑up that is non‑trading, unable to raise funds, and on the brink of insolvency, with an irretrievable breakdown among founders and a blocked voluntary liquidation, is a prime candidate for winding up under s.569(1)(e).
The classic categories of quasi‑partnership, deadlock, and failure of substratum remain useful but non‑exhaustive tools; the statutory words “just and equitable” retain their full breadth.
Alleged misconduct by the petitioner will only bar relief where it is serious, causative, and inequitable in context. Contract‑driven actions taken transparently and with shareholder support—such as enforcing leaver provisions or releasing non‑competes—will not normally suffice.
Directors in the zone of insolvency must actively consider creditors and cannot rely on blocking tactics without a viable plan; s.224A duties now inform the equitable evaluation under s.569(1)(e).
Parallel oppression proceedings do not automatically preclude a just and equitable winding up; their coexistence will be managed pragmatically by the court and, if necessary, by the liquidator.
Section 602 plays a crucial protective role in voiding share transfers after the commencement of winding up, ensuring that last‑minute alterations in ownership do not distort the liquidation process.

Taken together, the judgment offers a clear, modern template for resolving disputes in failing start‑ups where relational breakdown, impending insolvency, and contested exits collide. It reinforces that the High Court’s “just and equitable” jurisdiction is both flexible and principled, oriented towards fairness to all stakeholders, especially as a company approaches insolvency.