What Meetings Occur During a Company Administration?
The company administrator will be required to call up to two meetings:
Initial Creditors’ Meeting
Along with his statement of proposals, the administrator will send all creditors an invitation to a meeting, (notwithstanding certain exceptions).
The law states that this meeting should be held ‘as soon as reasonably practicable and within 10 weeks of entering administration.’ This limit could be exceeded by the specific permission of the court or the agreement of the creditors.
The administrator will give at least 14 days’ notice of this meeting, as well as to advertise it in the London Gazette.
No Initial Creditors’ Meeting Required?
The following three exceptions will mean no initial meeting is required:
(a) If the administrator’s statement of proposals makes it clear that company owns sufficient property to pay creditors in full.
(b) Those unsecured debts can be paid via property covered by a floating charge.
(c) That the insolvency practitioner believes the administration is not the right course of action (i.e. there is another option that would achieve a better result for creditors).
Further Meetings, as Requested by Creditors
If, after the first meeting, creditors whose debts amount to 10% or more of the total wish to convene another meeting, it is the administrator’s responsibility to follow their wishes. This request could also come from a court.