Published: 26/02/2025 By Andrew Bailey
When a company goes into Liquidation you will often have a virtual meeting of creditors as part of the process. I have had some heated ones on my cases recently and sometimes I attend them on behalf of a creditor. It is an opportunity for a creditor and/or their representative to attend and vote upon certain elements of a case.These meetings can be intimidating for creditors for various reasons. You need to attend one to understand the format, what is required of you and essentially how it works.
It is an opportunity to ask the director questions but to also decide the approach about a Liquidation in terms of which Liquidator is appointed, to decide the level of their remuneration and to consider whether to form a Liquidation Committee.
For those that have not attended one before you will find that the proposed insolvency practitioner will do a short introduction and then handover to creditors to ask questions of the director. Once those questions are finished then the insolvency practitioner will run all attendees through the formal part including considering the resolutions to deal with the appointment, remuneration and whether to form a Liquidation Committee.
When a creditor client passed me the paperwork in advance of a recent meeting it reminded me of just how challenging it is for a creditor to digest what they have received and to understand exactly what they need to do. They also have a very short time period to review it before needing to respond by the deadlines in advance of the meeting.
In my case it was a meeting worth attending because the director did receive extended questioning but more importantly we were able to encourage creditors to form a Liquidation Committee which in turn meant that the proposed Liquidator’s remuneration could not be approved at that time and until further information was made available to the Committee to fully understand the basis for the level of remuneration being proposed.
Hopefully for most people it is a rare occurrence to need to attend a meeting but if you are a creditor and receive a notice then do not be put off by the hideous bundle of paperwork that we are now required to circulate. If you can focus on a few points then these would be:
- Somewhere in the pack it will specify the date and time of the virtual meeting;
- Somewhere else in the pack it may give you details of how to call in or you may need to request this from the sender;
- Find the proof of debt form and complete and return it as soon as possible. Do this by 4.00pm on the day before the meeting;
- You can then complete or return the proxy form and/or attend the meeting depending upon what you want to do. I only know how to complete proxy forms from working in insolvency for 20+ years. If I didn’t then a proxy form would be utterly confusing to me. Get advice on completing it if needed.
You are all set. Get yourself on that virtual meeting and see what happens!
Your vote may be more important than you realise.