When a company becomes insolvent, the creditors have the right to attend a meeting and vote on the best course of action.
Creditors will receive notice of these meetings at least seven days before they are due to occur. If, however, they are unable to attend but still wish to make their opinion count, it is the creditors right to lodge a vote by proxy.
This means that they have assigned another person to attend in their stead, who will hold a statutory right to vote on their behalf.
A Written Authority
According to the Insolvency Act 1986, and the Insolvency Rules 1986 a proxy is defined as a ‘written authority’. Essentially, it is a form that can be filled out that grants legal authority to another.
When will creditors receive the form?
When creditors receive the notice summoning them to the meeting, they will also receive a proxy form (unless the court specifically ordered otherwise.)
How Should a Creditor Submit it?
Creditors are not obliged to use the exact form sent to them with the meeting summons, although it is recommended that the form is substantially similar. They should be completed and authenticated carefully, as they will be checked to ensure their validity.
Can Proxy Forms be Submitted by Fax or Email?
Proxy forms can be sent by fax within the time limits agreed. Since 2010, proxy forms can also be sent electronically (i.e. email) providing this is acceptable to the insolvency practitioner, and they have agreed to receipt of the proxy electronically. Emails should be accompanied by a statement of the identity of the sender, the exact nature of which will be clarified in advance by the recipient.