A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
The Creditors' Meeting in Liquidation Explained
When a company enters a Creditors' Voluntary Liquidation, a creditors' meeting is held. This is the formal occasion at which creditors vote to confirm the appointment of the liquidator and can ask questions about the company's affairs.
Understanding the meeting helps directors and creditors know what to expect.
When and How It Is Held
The creditors' meeting is held shortly after the members' meeting (often on the same day) - typically within a few weeks of the decision to liquidate. It is frequently held virtually, by phone or video, to make it easier for creditors to attend.
What Happens at the Meeting
The meeting typically covers:
- The Statement of Affairs - the liquidator or director presents a summary of the company's assets and liabilities.
- The history of the company - a brief account of how the company came to be insolvent.
- Appointment of the liquidator - creditors vote to confirm the nominated liquidator (or nominate a different one).
- Questions - creditors can ask the directors questions about the company's affairs.
- The liquidation committee - creditors may elect a committee to oversee the liquidation (though this is now less common).
Who Can Attend
Any creditor of the company can attend, in person or by proxy, and vote. Votes are based on the value of the debt owed to each creditor.
Do Directors Need to Attend?
A director must usually attend (often by phone) to present the Statement of Affairs and answer questions. In many cases, the nominated liquidator assists with the presentation.
What Happens After
Once the liquidator is confirmed, they take control of the company and the liquidation proceeds. Creditors receive updates from the liquidator as the process continues.
Speak to a Licensed IP
If you are a director facing a creditors' meeting, or a creditor invited to one, our Manchester-based practitioners will explain what to expect and how to prepare.