The primary purpose in the official receiver summoning first meetings is to secure the appointment of an insolvency practitioner as liquidator or trustee. Such meetings will also consider associated formalities including, where appropriate, the appointment of a liquidation or creditors’ committee.
Where a non-urgent Secretary of State appointment appears to be appropriate (see Chapter 17, paragraph 17.51) but there is the possibility of contention, dispute or conflict, either relating to the case or to the appointment of an insolvency practitioner, it may be preferable to hold a first meeting. This allows the creditors (and contributories) an opportunity to express their views and to provide further relevant information (see Chapter 17, paragraph 17.5).
The resolutions, which may be passed at first meetings, are restricted by the Insolvency Rules 1986 (see paragraph 16.47). The meeting is not a forum for dealing with creditors’ complaints, or for debate as to the causes of the insolvency, the conduct of directors or of the bankrupt, or, to discuss any other aspects of a particular case. The chairman may wish in such circumstances to arrange for a private meeting with the creditor after the conclusion of the first meetings to deal with any such matters [Note 1] [Note 2].
(Amended July 2010)
The official receiver may summon general meetings at any time, in order to ascertain the wishes of creditors (and contributories) in any matter regarding the liquidation or bankruptcy [Note 3] [Note 4]. The circumstances where such a meeting is likely to be warranted will be rare, especially where the official receiver is not the liquidator or trustee.
The Insolvency (Amendment) Rules 2010 (IAR) provided for the passing of resolutions by correspondence alone, without the requirement of holding a meeting, except where the Act requires that a resolution be passed at a meeting (see paragraph 16.131A).
First meetings should only be summoned where the assets in the case are sufficient to attract nominations from creditors or contributories for the appointment of an insolvency practitioner as liquidator or trustee, unless meetings are properly requisitioned by creditors, in which case they must be held [Note 5] [Note 6] (see Part 2).
Assets to be taken into account may include the prospect of civil actions for the recovery of monies, for wrongful trading, preferences, undervalue transactions or the setting aside of floating charges, provided funds are likely to be available to finance such actions, whether from creditors generally or from a particular creditor or creditors (see Chapter 31 for further information regarding assets).
With the introduction of the Regional Trustee and Liquidator Units (RTLUs) and the financial regime introduced by the Enterprise Act 2002 (EA2002), The Service has had a policy of retaining and dealing with cases where the asset realisations are straightforward and in the majority of cases, this will provide a greater return to creditors. Cases which the official receiver should look, to retain are those where the assets are readily realisable (see Chapter 17, paragraph 17.3 for further details).
In winding up proceedings, the official receiver has 12 weeks to decide whether to hold first meetings in the liquidation and any such meeting must be held within 4 months of the winding-up order [Note 7] [Note 8]. No meetings need to be held where a liquidator has already been appointed by the court (former administrator or supervisor of a voluntary arrangement) [Note 9].
In bankruptcy proceedings, the official receiver has 12 weeks to decide whether to hold a first meeting of creditors and any such meeting must be held within 4 months of the bankruptcy order [Note 10] [Note 11]. No meeting needs to be held where a trustee other than the official receiver has already been appointed by the court on the making of the bankruptcy order e.g. an order made on a criminal bankruptcy petition, or where the court appoints the former supervisor of a voluntary arrangement as trustee [Note 12].
The Insolvent Partnerships Order 1994 removed the requirement for the official receiver to hold meetings of creditors in every case and he/she is now under a similar duty to decide whether to hold a meeting of creditors in partnership cases as he/she is in winding up or bankruptcy cases. For further information regarding the holding of meetings in partnership cases, see Part 10. For further details on partnership cases generally see Chapter 53.
A decision as to whether to call first meetings should where possible, be made following the completion of the preliminary examination, when the Case Assessment Review (CAR) is completed. An early date can then be fixed for any meeting to be summoned. The full 12 weeks and 4 month statutory periods are to be used only in exceptional circumstances (see Chapter 15, paragraph 15.45 for further information on the recommended time limits applicable to the completion of the CAR forms).
If for any reason the statutory time limits detailed above, cannot be adhered to or notices cannot be sent out in time, an application must be made to the court for an extension of time [Note 13] [Note 14].
Where such an application, to extend the 12 week time limit is made, the official receiver should, where a meeting is required, also apply for extension of the 4 month statutory time period within which the first meeting must be held under rule 4.50 or rule 6.79 of the Insolvency Rules 1986.
The official receiver must give notice of his/her decision not to summon first meetings to the court and all known creditors and, in liquidation, to the contributories. The notice must be given within 12 weeks beginning with the day of the winding-up or bankruptcy order [Note 15] [Note 16] [Note 17].
Where notice of the decision not to summon first meetings is sent out, the notices to creditors, and where appropriate contributories, are usually accompanied by the report to creditors (see Chapter 18, paragraph 18.3). A proof of debt form may also be sent to creditors, where it is specifically requested and that creditor is unable or unwilling to access the online form through our website. Any other pending notices to creditors may also be sent out at the same time, although the sending of the no meeting notice should not be delayed in this regard.
Where in any bankruptcy case he/she decides not to summon a first meeting of the bankrupt’s creditors, the official receiver becomes trustee from the date on which notice to that effect is given to the court [Note 18] [Note 17].
16.15 Early appointment desirable
(Amended July 2010)
Where it is essential to get a practitioner into office as liquidator or trustee at a very early stage, application may be made to the court under rule 12A.55 of the Insolvency Rules 1986, to abridge the normal 14 days’ notice period (21 days for pre 6 April 2010 cases) required under the Insolvency Rules 1986 [Note 19] [Note 20]. This should only be done in exceptional circumstances.
Alternatively, in a bankruptcy where a first meeting would normally be held, but it is essential for there to be a trustee (rather than a receiver and manager) in office, because the immediate use of the trustee’s wider power is desirable, the official receiver may send out notice that a meeting will not be held (so he/she becomes trustee) [Note 17] [Note 15] [Note 16]. Where deemed necessary, such a notice should be accompanied by a brief covering letter explaining the circumstances and indicating that a general meeting will be held in due course to consider the appointment of an insolvency practitioner as trustee. Alternatively, where the notice of no meeting is issued with the report to creditors, a statement to this effect may be included in the report to creditors.
See also Chapter 17, Part 5 for details of the exceptional circumstances where immediate application may be made for a Secretary of State appointment without a meeting having first been held.