Creditors' meetings and creditors'/liquidation committees
Procedures for calling a meeting of creditors and for appointing a creditors' committee or liquidation committee.
The official receiver (OR) usually decides to hold a first meeting of creditors if there are significant assets to be realised - ie sold. This is so creditors can vote to appoint an insolvency practitioner (IP) as trustee or liquidator.
If the OR doesn't believe the assets available are enough to attract an IP, the OR will send notice to all creditors that no first meeting is to be held and that they will be the trustee/liquidator.
The OR must hold a first meeting if it's requested, in writing, by enough creditors to account for at least 25% of the value of debt owed. Creditors requesting a meeting have to lodge a deposit to cover any costs of that meeting.
Further meetings of creditors - called general meetings - are sometimes held, if:
- requested by enough creditors to account for at least 25% of the value of debt owed
- the trustee/liquidator wants to find out the creditors' wishes in any matter relating to the insolvency proceedings
Where an IP is trustee/liquidator, a final meeting of creditors will eventually be called - see completion of bankruptcy and company liquidation cases.
Appointing a creditors'/liquidation committee
Where an IP is appointed, a creditors/liquidation committee can also be appointed to supervise the trustee/liquidator on behalf of the creditors. In liquidations - it's called a liquidation committee, in bankruptcies - it's called a creditors' committee.
The committee consists of between three and five elected creditors. You have a right to nominate yourself or any other creditor to be a committee member, and you can vote for yourself. The elected creditor can act personally, or appoint a representative.
If certain actions are proposed by the trustee/liquidator, they need to be approved by the creditors'/liquidation committee.