What Happens if a Creditor Cannot Join the Virtual Meeting?
From the day after the Creditors Voluntary Liquidation shareholders’ meeting, directors have seven days to deliver a notice to creditors, requesting their decision or vote on these resolutions via correspondence or email, electronic voting, virtual meeting, such as video conferencing or deemed consent.
Creditors must vote at least three days after the notice is delivered and no later than 14 days after the shareholders’ meeting. One business day before the meeting process, the Statement of Affairs (SOA) is delivered to creditors. The SOA report is a type of balance sheet of the company’s assets and liabilities. It presents an accurate picture of the company’s financial situation and equips the creditors with all the information they need prior to the meeting.
A company director convenes and chairs the meeting process, with the assistance of the liquidator. The latter will decide which platform is appropriate once he or she knows how many creditors are going to be involved. The virtual meeting via conference call or video conferencing, for instance, can be held at any time during a business day. Typically, directors or conveners are mindful of the timing and platform to provide maximum accessibility to creditors.
Once the platform has been decided, for example, Google Hangouts, the director or convener sends creditors a notice of the meeting and provides details on how to gain access to the meeting with a phone number, access code or password, which will safeguard against unwanted participants as well as identifying ‘excluded persons’ on the day.
When a creditor has done everything possible to attend the meeting, but through no fault of their own, the website crashes or he or she can’t get online due to a connection failure, for instance, then the chair will note that there is an ‘excluded’ person’. In this scenario, the chair has a handful of options: he is she can continue the meeting; declare it void; declare it valid up to the point where the person was excluded; suspend it temporarily for up to an hour or adjourn it.
The meeting will be valid if the chair continues, which means the resolutions passed by the creditors will also be valid. If this happens, the excluded person may feel frustration and want to know what happened whilst he or she was ‘excluded’. The creditor may want to make a complaint to the liquidator about the decision to continue the meeting. In this case, the creditor has until 4pm the next working day to make a complaint to the liquidator. As a result, the liquidator may decide to reschedule the meeting or change the result of the meeting if the voting is a close-run thing and he or she believes that the excluded person’s vote will overturn resolutions already though passed.
The new insolvency rules were introduced in April to make communication faster and more effective during a company liquidation. If you would like to know more about the changes or to discuss whether a CVL is the right option for your insolvent company, please call 08000 746 757 or email firstname.lastname@example.org for free and confidential advice from one of our professional advisers.