Use of proxies to effect appointment

September 2006 

17.39 Proxies generally

A proxy is an authority given by a person, "the principal", to another person, "the proxy-holder", to attend a meeting and speak and vote as his/her representative [note 1]. A proxy for a particular meeting may be given to the official receiver [note 2]. 

A proxy given for a particular meeting may be used at an adjournment of that meeting [note 3].

A proxy can give specific instruction for the holder to vote in a particular way on a given resolution [note 4] or confer a general voting discretion.

General information on proxies can be found in Chapter 16 Meetings - Part 6, Proxies.

17.40 Specific directions to proxy holder

Where a proxy gives specific directions as to voting, this does not, unless the proxy states otherwise, preclude the proxy holder from voting at his discretion on resolutions put to the meeting which are not dealt with in the proxy [note 4].

17.41 Rights of a general proxy holder

A proxy conferring general voting discretion "general proxy" entitles the proxy-holder to vote in favour of or against any resolution proposed and entitles that proxy-holder to propose any resolution, including one for the appointment of an insolvency practitioner as liquidator or trustee [note 5]. This allows a proxy-holder more discretion if his/her principal desires.

The chairman of the meeting needs to consider the wording of the proxy to ensure that the proxy-holder is acting in accordance with his/her principal’s wishes, particularly if the proxy-holder is proposing the nomination of an insolvency practitioner under a general proxy.

If two or more proxies are received on behalf of the same creditor the chairman of the meeting will have to consider which proxy is the valid one and the official receiver should report such incidents to IP Policy Section.

17.42 Official receiver use of general proxies

The official receiver holding a general proxy or proxies may support nominations from others or vote for or against any resolution when he/she believes that in so doing he/she is securing the best interests of the majority of the creditors. The official receiver should not normally use general proxies to support resolutions that would not otherwise be passed. A file note should be kept to show the basis for the official receivers' actions.

The official receiver may exceptionally use the general proxies to secure the appointment of an insolvency practitioner (see paragraph 17.39).

17.43 Official Receiver using general proxies for appointment of insolvency practitioner

If, but only if, there is no other nomination leading to the appointment of a liquidator or trustee at the meeting convened by the official receiver, the chairman of the meeting, if holding a general proxy or proxies, may propose a resolution for the appointment of a liquidator or trustee. The chairman must propose the insolvency practitioner on his/her rota who would next be entitled to a Secretary of State appointment. General proxies held by the chairman may be used to vote in favour of that resolution.

17.44 Next rota insolvency practitioner unsuitable (updated September 2012)

Where the next insolvency practitioner on the rota is known not to be a suitable nominee for the case, either because of an association with the company or the bankrupt or for other ethical reasons, general proxies may be used to nominate the next practitioner on the rota.  The chairman of the meeting must record the reasons for not using general proxies to nominate the next insolvency practitioner on the rota and must be prepared to justify his/her actions if challenged.  Further details of the use of rotas can be found at Annex E.

17.45 Specialist insolvency practitioner

Exceptionally, it may be proposed that a "specialist" insolvency practitioner is required to deal with assets of an unusual nature or that a particular insolvency practitioner is more suitable as he/she is liquidator or trustee in a connected case. The official receiver may use general proxies to effect such an appointment at the meeting and must record his/her reasons for doing so.

17.46 Records of use of general proxies

The chairman of the meeting should ensure that a file note is made to record the circumstances of any nomination and appointment using general proxies held by him/her. The official receiver should record such appointments so that it can be established without difficulty that the rota has been used properly.


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