What Happens if the Chairman of the Meeting Disagrees with a claim in a Creditors’ Meeting?

In the case of a creditors voluntary liquidation, it is the right of the chairman to admit or reject any creditor’s claim. This decision can be appealed to the court by any creditor.

How do Creditors Obtain the Right to vote?

In order to be eligible for a vote, any creditor must submit a proof of his debt to the company chairman.  That proof should be in written form and include the total amount of the claim, the amount of outstanding uncapitalised interest (if that is a factor), and some clear details of how and when the debt arose. If this is the secured debt you need to state as much, as well as details of any reservation.

The Chairman’s Right to Admit or Reject the Proof

If the chairman does not deem the proof acceptable he can simply disallow the creditors’ vote. If the chairman is unsure he may allow the creditor vote while marking the proof as objected to. In this situation, any vote would be declared invalid if the objection to the proof is sustained.

A creditor has a period of 21 days after the date of the meeting to make an application to the court to have the decision by the chairman overturned.

When a Creditor Appeals to the Court Regarding his/her Claim

If a creditor appeals to the court who then overturns the chairman’s decision, the court may order a new creditor’s meeting to take place or an order has it sees fit.

Read more about Creditors’ Voluntary Liquidation

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