CONDUCT OF MEETINGS
The chairman has various responsibilities associated with the conduct of meetings, including decisions as to who will be in attendance at the meeting; which proofs of debt will be admitted for voting purposes; which proxies are valid; which resolutions will be put to the meeting and which questions if any may be asked of the company personnel or bankrupt.
(Amended July 2010)
Where the official receiver nominates someone other than another official receiver or a deputy official receiver to be chairman of a meeting (i.e. a senior examiner or an examiner) that nomination must be evidenced in writing [Note 1] [Note 2] [Note 3].
For all post 6 April 2010 cases, if within 30 minutes from the time appointed for the meeting to commence, there is no suitable person present at the venue to act as chairman of the meeting, the meeting is automatically adjourned to the same time and place in the following week, or if that is not a business day, to the business day immediately following [Note 4] (see paragraphs 16.52 to 16.54).
It is recommended that the chairman review details of the insolvent case in preparation for the meeting, for example, the company’s formation; share capital; registered offices; trading addresses; particulars of directors etc; a brief note as to the trading and financial history of the company or bankrupt; a summary of pertinent events leading up to the liquidation/bankruptcy and the reasons given for the company’s or bankrupt’s failure. Most of this information will be contained within the CAR A. Where the case involves non-cooperation and/or further relevant information has come to light regarding the value of any assets or liabilities since the drafting of the CAR A, this information should also be reviewed.
Meetings in the liquidation consist of two separate meetings, the meeting of creditors followed by a meeting of contributories. Both should be held on the same day, with the contributories meeting immediately following that of the creditors.
(Amended July 2010)
Creditors (or where it relates to a meeting of contributories, contributories) and their respective proxy-holders are the only persons entitled to be present and take part in meetings [Note 5] [Note 6] [Note 7] [Note 8]. A creditor who has not been notified of a meeting, but discovers the existence of the meeting by some other means is not excluded from attending [Note 9].
Any creditors who have not proved, or whose proof has been wholly rejected may be admitted to the meeting, but will not be allowed to take part in the proceedings [Note 10] [Note 11] [Note 12] [Note 13]. The chairman may wish to obtain the views of such creditors where relevant either before or after the meeting.
Other parties such as an administrative receiver may request and be allowed to attend meetings, at the discretion of the chairman, on the basis that they may be in a position to give information if required [Note 14] [Note 15]. Reporters have no right to be present but they may be admitted unless the chairman of the meeting is of the opinion that their attendance is undesirable.
Post 6 April petition cases:
The IAR 2010 introduced a provision which allows the chairman to accept the vote of a creditor who has failed to lodge a valid proof, if he/she is satisfied that the failure was due to circumstances beyond the creditor’s control [Note 18]. The official receiver should carefully consider the circumstances surrounding the failure to lodge a valid proof, particularly if the creditor’s vote would have a significant effect on the outcome of the meeting. In these circumstances it may be preferable to adjourn the meeting to a later date to allow sufficient time for the creditor to lodge a valid proof (see paragraphs 16.52 to 16.54) .
See part 5 for more information about proofs of debt.
Where the company personnel, to whom notice of the meetings has been sent, are creditors or contributories, they have a right to attend and take part in the relevant meeting in that capacity (see paragraph 16.39 above) [Note 19] [Note 20].
Where requested by the official receiver’s notice (see paragraphs 16.32 and 16.33) the company personnel or bankrupt should be present, or in attendance, at the meetings (see paragraph 16.34). Where they are not otherwise entitled to take part in the meetings, it is a matter for the chairman to decide whether to allow any such person to sit in on the meetings, or simply to arrange for them to be available if required. If they are present at the meetings upon request and for any reason their presence becomes undesirable they should be asked to leave.
Where the creditors’ meeting consists of only one creditor entitled to vote, either present or represented by proxy (including by the chairman), the chairman should review the list of creditors to establish the comparative value of the creditor’s claim and the total number and value of creditors. Where there are other creditors with significant claims, who would be entitled to prove, but these creditors have not complied with all the necessary formalities, the meeting may be adjourned at the chairman’s discretion to allow such creditors to prove should they wish to do so (see also paragraphs 16.43 and 16.52 below).
In the case of Alcom Ltd, the Court of Appeal held that the chairman of a meeting should have adjourned the meeting for which a proof had been received out of time for admission from the director so that the director could vote in his capacity as a creditor. The Court held that the refusal to allow him to vote meant that the results of the meeting did not truly reflect the views of a majority of the creditors by value.
Where a quorum either is not expected, or cannot be achieved at the adjourned meeting of creditors, the meeting should not be further adjourned [Note 22]. Instead, an application to the Secretary of State should, if appropriate, be made for the appointment of the next insolvency practitioner on the official receiver’s rota (see Chapter 17, paragraph 17.51).
A quorum is established at a meeting of contributories where at least two contributories are entitled to vote. Where there is only one contributory provided with an entitlement to vote within the articles of the company, a quorum may be established by virtue of their presence, either in person or by proxy and entitlement to vote at the meeting [Note 23] [Note 8]. In a winding up where a liquidator is nominated at a creditors’ meeting and there is no quorum at the contributories’ meeting, the latter meeting can be closed immediately and the creditors’ nominee appointed as liquidator.
If a quorum is not present at the meeting within 30 minutes of the time it was due to commence, the chairman may, at his/her discretion, adjourn the meeting (see paragraph 16.52 below) [Note 24] [Note 25].
Where there is a quorum at the meeting consisting of the chairman alone or with one other; and the chairman is aware of others (from the proofs and proxies submitted) being entitled to vote, were they in attendance; he/she should delay the start of the meeting for at least 15 minutes [Note 26].
After satisfying himself/herself that the persons present at a meeting are entitled to be there, or that there are no objections to other persons present [Note 27] [Note 15], it is usually desirable to start the proceedings by stating the purpose of the meeting and providing those present with a brief summary of the information in the report to creditors, if this has been sent out. It is usual in company cases for most of the information held to have been provided by the officers, who are often contributories. The chairman may therefore not need to spend so much time providing information to the contributories’ meeting, as he/she will have done at the creditors’ meeting.
It is not unusual for persons attending meetings to ask questions and, although the chairman has a discretion as to which questions he/she allows [Note 14] [Note 15], he/she should exercise it with caution. If he/she decides to allow questions to be asked he/she should only do so on the clear understanding that such questions are to be put to him/her and that, if he/she does not already have answers to them, he/she will decide whether to seek information from any company personnel or the bankrupt attending or present at the meeting [Note 28] [Note 29].
Questions permitted should be limited so far as possible to matters material to the purposes of the meeting and the chairman should make a note of the questions and answers for future reference. Where any matter is raised which cannot be dealt with at the meeting, the chairman should seek to clear the point up by subsequent correspondence. It is usually preferable for persons seeking or offering information, which relates to confidential or contentious matters to be invited to a private interview with the (assistant) official receiver or his/her examiner.
(Amended July 2010)
The resolutions, which may be taken at a meeting of contributories, are the same with the exception of points c and e above [Note 34]. There can be no resolution at either meeting for the appointment of the official receiver as liquidator or trustee [Note 35] [Note 36].
Further information regarding the passing of resolutions and voting generally is contained in Part 7).
For a contributories’ meeting the same provisions as regards proxies or personal attendance apply [Note 6]. However, additionally there may be provisions within the articles of the company affecting entitlement to vote and these should be checked prior to the meeting where appropriate [Note 8].
(amended February 2012)
In relation to any meeting in a liquidation, a company which is a creditor or contributory may appoint a person or persons to represent it [Note 39]. Any such representative who attends a meeting of creditors or contributories is to be treated as a creditor present in person (see also paragraph 16.107).
The chairman has discretion to suspend the meeting, once, for any period up to one hour. This may prove useful where, for example, a proxy-holder needs to obtain further directions from his/her principal, or where, with a contentious meeting, a "cooling-off" period is desirable [Note 40] [Note 41].
(Amended July 2010)
If it appears desirable to adjourn a meeting for any purpose, the chairman may do so either at his/her discretion or by resolution at the meeting. A proof or proxy given for a meeting may be used at any adjournment of that meeting. Any proofs and proxies for use at the adjourned meeting must be received by midday on the business day immediately before the adjourned meeting [Note 42] [Note 43] [Note 44]. Notice of the adjourned meeting should, if the chairman sees fit, be sent to the company personnel or bankrupt, where they were not at the meeting [Note 45] [Note 46]. If at an adjourned meeting there is no quorum of creditors (see paragraphs 16.41 to 16.43), the meeting should not normally be further adjourned. An adjournment must not be for a period of more than 14 days (in cases where the petition was presented before 6 April 2010 an adjournment must not be for more than 21 days) [Note 42] [Note 47] [Note 48].
Regard should always be had to the overall wishes of the creditors when considering an adjournment. Where there is a quorum and those present or represented wish to nominate a practitioner to act, the meeting should not be adjourned only because it is known that creditors not present or represented wish to make a different nomination. The exception to this general rule is where the chairman is aware of a creditor whose vote could be decisive, who wishes to nominate a practitioner to act as liquidator or trustee, but the creditor has not complied with all of the necessary formalities (see paragraph 16.41).
(Amended July 2010)
Pre 6 April 2010 petition cases:
For pre 6 April 2010 petition cases the Rules do not restrict the number of adjournments that can occur. The chairman should, however, discourage the repeated adjournment of a first meeting and if adjournments are consistently resolved upon to no good purpose, the official receiver should apply to the court for directions. He/she should ask the court to direct that there be no further adjournment of the meeting. The adjourned meeting should, unless otherwise resolved, be held at the same place as the prior meeting [Note 43] [Note 44] [Note 49].
Post 6 April 2010 petition cases:
In post 6 April 2010 petition cases, all meetings have to be concluded not later than 14 days from the date the meeting was fixed to commence (subject, in first meetings, to any direction of the court). First meetings may be adjourned several times provided that they are completed before the 14 day limit [Note 50]. For general meetings, if there is to be a further adjournment it must be to the same time and place in the following week. However, if that day is not a business day or if it is more than 14 days after the date on which the meeting was originally to be held, the meeting must be adjourned to the same time and place on the business day immediately preceding the 14th day [Note 51] [Note 52].
There is no statutory duty to give notice of or advertise an adjourned meeting.
If it is considered that lack of notice would tend to defeat the purpose of the adjourned meeting, such as where there was no quorum at the first meeting, notice should be given when the length of the adjournment permits [Note 43] [Note 44].
Where the creditors or contributories have not resolved on the appointment of an insolvency practitioner, but the first meeting has been closed or abandoned, the chairman will decide whether or not to apply to the Secretary of State for the appointment of an Insolvency Practitioner [Note 53] [Note 54]. For more information on Secretary of State appointments, please see Chapter 17, paragraph 17.51. In a bankruptcy, the court must be notified of the chairman’s decision not to refer the matter to the Secretary of State (or on such a reference where the Secretary of States declines to make an appointment) and the official receiver becomes trustee on the filing of this notice [Note 55] [Note 56].
(Amended July 2010)
In cases where an insolvency practitioner has been appointed following a resolution passed at a meeting, the appropriate director, partner or bankrupt must be informed of the appointment of the liquidator or trustee [Note 57].
In cases where the petition was before 6 April 2010, the court must be notified of the outcome of the meeting by the chairman within 21 days of the meeting [Note 58] [Note 59] [Note 60]. The chairman will need to sign the form of notice with a copy being retained for the office file.
In post 6 April 2010 petition cases the chairman is no longer required to send notification of the outcome of the meeting to the court (unless, in a bankruptcy, there was no nomination for the appointment of an insolvency practitioner and the official receiver decides not to seek a secretary of state appointment – see paragraph 16.55)
(Amended July 2010)
The chairman must prepare and authenticate minutes of the meetings. The minutes must include details of every resolution passed and if a liquidation committee or creditors’ committee has been established the names and addresses of those elected as members must be recorded. The minutes must be retained as part of the records of the proceedings. A list of all those attending the meetings must also be drawn up and kept [Note 16] [Note 17] [Note 61] [Note 62].
The creditors and contributories at their respective meetings may nominate different insolvency practitioners to be liquidator. The creditors’ nominee takes precedence over any nomination made at the contributories meeting [Note 63]. If the creditors do not pass a resolution for an appointment but the contributories do, the appointment made at the contributories’ meeting will take effect.
If in a winding up the creditors’ nominee is appointed, but a different practitioner was nominated by the contributories, either a creditor or a contributory may, within 7 days of the nomination, apply to the court for the appointment of the contributories’ nominee to be liquidator instead of, or jointly with, the creditors’ nominee, or for another practitioner to be appointed in place of the creditors’ nominee [Note 64].
The chairman of the meetings should certify the appointment of the creditors’ nominee in such cases, notwithstanding that an application may be made to the court (see paragraph 17.31 for further information).
(Amended July 2010)
Where an insolvency practitioner has been appointed liquidator or trustee as a result of a meeting, the effective date of his/her appointment will be when the chairman certifies the appointment, following receipt of a written statement to the effect that the person nominated is an insolvency practitioner, is duly qualified and consents to act [Note 65] [Note 66] [Note 67].
The date of appointment is endorsed on the certificate of appointment when authenticated by the chairman [Note 68].
The certificate is required to be sent to the liquidator/trustee by the chairman [Note 69] [Note 70] (for pre 6 April 2010 petition cases the chairman is also required to file a copy of the certificate with the court). This certificate of appointment may be produced in any proceedings as proof that the liquidator/trustee is duly authorised to exercise the powers and perform the duties of his/her office [Note 71] [Note 72]. See Chapter 17, Part 4, paragraph 17.33 in particular for further information regarding appointment and certification of insolvency practitioners as liquidator or trustee.
Post 6 April 2010 petition cases:
Where the official receiver is replaced as liquidator or trustee (not receiver and manager) as a result of the appointment of an IP following either a meeting of creditors or a Secretary of State appointment, the Act requires that notification be given to the court in order for the official receiver to obtain his/her release [Note 73] [Note 74]. The forms for notifying the court of the official receiver’s replacement as liquidator or trustee in these circumstances can be accessed through the OROS intranet site or by following this link http://intranet/OROS/CaseMngment/DocProd/DocProdHome.htm.
(Note: these forms will also be available on ISCIS).
Where the chairman is aware that the insolvency practitioner is authorised to act as such and is known to the official receiver, it may be possible to arrange for the handover to take place on the day of the meeting.
From the date of appointment, not handover, the insolvency practitioner has a personal responsibility for the assets. If it appears likely in advance of a meeting that an insolvency practitioner will be appointed, which it should be in the majority of cases, there is no reason why all the papers cannot be prepared for handing over to the insolvency practitioner or his/her representative immediately after the conclusion of the meeting. If the official receiver is unaware whether the appointed insolvency practitioner is authorised to act, no documents should be handed over until that confirmation has been received (see paragraph 17.82 for further information).