A general meeting of creditors may be requisitioned by 10% of creditors in value [Note 3] [Note 4]. The provisions within section 168(2) of the Insolvency Act 1986 impose a duty upon a liquidator to summon a general meeting, when requisitioned appropriately, although the court has jurisdiction to direct the liquidator not to comply and therefore override this duty, where it does not appear to be in the best interest of creditors in general [Note 5]. The court has similar powers in bankruptcy [Note 6].
A creditors’ requisition should be on Form 4.21 or Form 6.34, a contributories’ requisition should be on Form 4.24 [Note 8] [Note 9] [Note 10]. The requisition need not be accepted if not in the style laid down in the relevant form. However, if a requisition by ordinary letter contains all of the information which would normally be found in the prescribed form, the official receiver may accept this as a valid requisition.
The appropriate requisition form should be accompanied by:
A creditor may only request a first meeting for the purpose of appointing a liquidator or trustee other than the official receiver [Note 13] [Note 14]. Notice of requisition for a general meeting must state the purpose of the proposed meeting [Note 15] [Note 16]. The official receiver may wish to ascertain the underlying reason for the requisitioning creditors’ or contributories’ desire to have a meeting, where there appear to be no assets in a case.
If the reason for the requisitioned meeting is other than for the appointment of an insolvency practitioner as liquidator or trustee, the official receiver should try to discourage the requisitioner(s) by explaining by telephone or in writing, the proper purpose of summoning meetings, and advising them that the cost of the publication of the notice of the meeting and any charges incurred for hire of an appropriate room for holding such meetings must be paid in advance by the requisitioning creditors or contributories [Note 17] [Note 18].
Where in winding up proceedings creditors requisition a first meeting, meetings of both creditors and contributories must be held; the creditors cannot requisition a creditors’ meeting alone [Note 8].
Requisitioned first meetings should be held within 3 months of the receipt of the request, or of the payment of the estimated costs of the meeting whichever is later [Note 8] [Note 19] [Note 10] [Note 20].
The official receiver should withdraw any notices previously given by him/her that he/she has decided not to summon a first meeting and act as though he/she had decided to convene the meeting [Note 8] [Note 10]. (Please see Part 3 for further information on the issue of notices generally).
Where the official receiver receives a valid requisition to hold first meetings he/she is released from the duty to decide whether or not to hold a meeting of creditors. Requisitioned first meetings do not have to be held within the statutory time period of 4 months of the bankruptcy or winding-up order date applicable to first meetings otherwise convened by the official receiver [Note 21] [Note 2].
(Amended July 2010)
Where in a winding up creditors requisition a general meeting the requisition must specify whether a meeting of creditors only or a meeting of creditors and contributories is to be held [Note 22].
Requisitioned general meetings should be held within 28 days of the receipt of the request (in cases where the petition was presented before 6 April 2010 the meeting should be held within 35 days of receipt of the request), or of the payment of the estimated costs of the meeting whichever is later [Note 23] [Note 24].
In bankruptcy, section 314(7) gives a general power to the trustee to call a meeting of creditors or for the creditors (representing 10% in value) to requisition a meeting of creditors. Whilst the trustee may convene a meeting under this section for the purpose of seeking the appointment of an IP to replace him /her as trustee, a general meeting requisitioned by creditors for this purpose will in most cases need to be made under the provisions of section 298(4) where a higher level of creditor support is required (25% in value) - see paragraph 16.22 below. The exception is where the official receiver is trustee ex officio (see Chapter 1, paragraphs 1.58 and 1.59). In this case creditors may requisition a meeting to appoint a trustee in his/her place and this is called and held in accordance with section 314(7) [Note 24A].
Similarly, in liquidations section 168(2) gives authority for general meetings to be requisitioned by 10% in value of the creditors or contributories but where the purpose is to seek to replace the official receiver as liquidator the provisions of section 172(3) take effect – see paragraph 16.23.
(Amended July 2010)
Section 298(4) provides that where the official receiver has been appointed as trustee following the filing of a notice of no meeting [Note 25] [Note 26]; or where a meeting fails to appoint a trustee and the official receiver decides not to refer the need for an appointment to the Secretary of State [Note 27]; or where upon such a reference the Secretary of State declines to make an appointment [Note 28], 25% by value of creditors may requisition a general meeting for the purpose of replacing the official receiver as trustee [Note 29]. There is no provision for creditors to requisition a general meeting for removal of the official receiver as trustee where a criminal bankruptcy order has been made [Note 30].
(Amended July 2010)
Section 172(3) provides that where the official receiver is liquidator, other than by virtue of a vacancy created following release of a liquidator appointed at a creditors’ meeting, 25% by value of creditors may requisition a general meeting for the purpose of replacing the official receiver as liquidator [Note 31]. There is no provision for contributories to make such an application.
Where a meeting has been properly requisitioned, the official receiver should contact the requisitioning creditors (or an agreed representative creditor, if the requisitionists are numerous) requesting payment of the expenses of summoning and holding the requisitioned meetings [Note 32]. No action should be taken by the official receiver with regard to summoning requisitioned meetings until the estimated costs have been paid [Note 19] [Note 20].
The fixed administration fee is expected to cover all of the usual expenses of the insolvency [Note 33], however, where costs are incurred outside of this by the request for a meeting it is not unreasonable to expect the requisitioning creditor(s) to cover these costs. Such costs will usually be limited to amounts necessary for hiring a room for the purpose of holding the meeting and advertising the meeting. (See Chapter 36, paragraph 36.44 – 36.45 for further information regarding the payment of costs for requisitioned meetings).