What Software is Used in a Creditors’ Meeting?
The government introduced a series of changes to the insolvency rules in April, one of which replaces the requirement for a formal face-to-face creditors’ meeting with other more accessible decision-making procedures, such as correspondence or email, electronic voting and virtual meetings. ‘Deemed consent’ was also introduced, where the liquidator assumes creditor agreement if no objection has been made to the proposals. However, deemed consent cannot be used to agree to liquidation fees and an alternative decision-making process must take place to decide on this matter.
Aside from the official decision-making procedures, creditors still have the right to request a physical meeting if they meet the 10/10/10 rule. This involves gaining the support of 10% of creditors (in value) or 10 individual creditors or 10% of creditors (in number) for the physical meeting to be granted.
The new insolvency rules promote faster and more effective communication. It’s expected that creditor participation in the CVL process will rise as electronic voting and video conferencing are without a doubt more convenient, with the added benefit of reducing the overall costs of the liquidation to maximise returns to creditors in the form of dividends.
Disadvantages of a Virtual Meeting
Virtual meetings are evidently more convenient. However, websites can crash websites can crash and creditors may not be able to get online due to an unreliable connection. This results in the creditor becoming an ‘excluded person’ from the meeting. Another disadvantage is that the notice must be advertised in The London Gazette otherwise known as The Gazette, which will incur a cost. The Gazette is a daily newspaper and website produced by the government to publish notices, such as liquidations and winding up petitions. The advert is placed once the notice of the meeting has been delivered to creditors. Another disadvantage is that there may also be costs involved in providing the virtual service. This will be dependent on the provider.
Platforms, such as Google Hangouts provide all the benefits of face-to-face contact without the requirement of actually having to spend valuable time ttravelling to a meeting. This particular platform can be used for business meetings with up to 25 participants. Another benefit is that it can be used across numerous devices, such as laptops, tablets or phones. The technology is advanced and focuses on whoever is speaking during the conference and uses ‘intelligent muting’ to prevent background noise.
Software for electronic voting is widely available and free of charge. For example, through Survey Monkey, a survey can be created with a multiple choice question and a single answer choice. Each answer can be labelled with the name of the respondent/creditor. This platform also makes sure each respondent votes once and the liquidator is able to keep track of creditors who have or haven’t voted.
The liquidator decides on the platform once he or she knows how many creditors are going to be involved in the process. Once the appropriate platform has been selected, the director or convener sends a notice of the meeting to creditors, providing details of the meeting and how to gain access to the meeting, such as a phone number, access code or password.The meeting is chaired by a director with the assistance of the liquidator.
The notice of the meeting will also include a statement, setting out that the meeting can be suspended or adjourned by the chair should it become hostile or there is a break in the audio-video link, for instance.
If you would like to know more about the decision-making processes available to creditors in a Creditors’ Voluntary Liquidation, please call 08000 746 757 or email email@example.com for free and confidential advice from one of our professional advisers.