August 2006
Introduction
i the meeting decision
The official receiver has to decide whether or not to hold a first meeting of creditors in every case. The decision will generally depend upon the nature and realisable value of any assets in the estate. In company matters where a decision has been made to hold a meeting of creditors there must also be a meeting of contributories. For more information see paragraph iii.
A decision as to whether or not to call a first meeting should normally be made following completion of the Case Assessment Record (CAR). The decision must be recorded on LOIS.
ii What are first meetings for?
(November 2007)
First meetings should only be summoned where the appointment of an Insolvency Practitioner (IP) as trustee or liquidator is appropriate after considering the guidance given in Technical Manual Chapter 17, paragraph 17.3 and unless meetings are properly requisitioned (see Case Help Manual part : Meetings – Requisitioned meetings. First meetings are not held with a view to providing a forum for debate as to the causes of the bankrupt's or company's failure or to discuss any other aspects of a particular case.
iii what is a contributories meeting?
In a company case, there are two meetings which need to be held, creditors and contributories meetings. In most cases with which the Official Receiver deals, contributories will be the shareholders. Throughout this part the two meetings will be referred to as ‘the meeting’ except where a contributories meeting requires a different action, in which case it will be specified.
iv does the Official Receiver always have to decide whether to hold a first meeting?
Yes, except in cases where the court has appointed a trustee or liquidator other than the official receiver at the hearing of the petition. For instance, where the court has appointed the supervisor of a voluntary arrangement as trustee or liquidator.
v how long has the Official Receiver got to decide?
The Official Receiver is required by the Insolvency Act 1986 to decide whether to call a meeting and, if appropriate, to give notice of a no meeting decision within 12 weeks of the order. Meetings must be held within 4 months of the order. At least 21 days notice of the meeting is required.
vi what if the time limit is missed?
In the very rare circumstances where it appears that the time limits will not be able to be met, an application must be made to the court for an extension of time before the period expires.
vii what if the case is not in the local court yet?
This should not hold up the sending of notices of the meetings decision. If the case is in the process of being transferred to a local court, only notice to the court of the Official Receiver’s decision should be held back.
viii who can attend the meeting of creditors?
Only creditors or their proxy holders are legally entitled to attend the creditors meeting, but others may be admitted if the chairman considers they have information which may be useful.
The bankrupt or company personnel attend only if the official receiver tells them that they are required to do so.
ix what is a ‘proxy holder’
A proxy holder is a person whom a creditor or contributory has authorised to attend the meeting and vote on his/her behalf.
x can creditors put questions to the bankrupt/company director?
In most cases the bankrupt or director will not be in the room for the meeting. The chairman may allow questions, but these should relate to the purpose of the meeting - so they would usually be about the location and value of assets.
Where can I find out more?
Technical Manual Chapter 17, Appointment of Liquiditors and Trustees part 1, paragraph 17.3
Insolvency Act 1986:
Sections 136(4)-(6) Duty of Official Receiver to call and
Sections 293 - 294: Meetings
Sections 140 and 297: Where a Trustee or Liquidator appointed on making of order
Section 376 Extension of time in bankruptcies
Insolvency Rules:
Rule 4.3 Extension of time in liquidations
Rule 4.54 and 6.81 Official Receivers power to call meetings at any time