Statutory meeting of creditors

• Date and place of meeting
• Representation
• Quorum
• Procedure at the meeting
• Voting
• Objections
• Adjournment of meeting
• Further information

Date and place of meeting

In all sequestrations (except those where the interim trustee is the Accountant in Bankruptcy), the interim trustee must hold a meeting of creditors within 60 days of the date on which sequestration was awarded. This is called the statutory meeting.

In the cases where the Accountant in Bankruptcy is the interim trustee she must, within the same period, notify the creditors of whether or not she intends to call astatutory meeting of creditors.

If the Accountant does call a statutory meeting, shemust do so within 28 days of the notification. The creditors must be given at least 7 days notice of the date, time, and place of themeeting.

These time limits cannot be extended without the approval of the sheriff. Anymeeting which does not comply with the above requirements is incompetent.The meeting should be held at a place which is, in the opinion of the interim trustee,most convenient for the majority of the creditors..

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Representation

1. When the interim trustee is the Accountant in Bankruptcy, her functions as interim trustee may be exercised by an authorised member of the Accountant's staff or by an insolvency practitioner acting as her agent. All references in this leaflet to the interim trustee include such authorised staff or agents.
2. Of the creditors
   An individual creditor entitled to attend the meeting may authorise another person to represent him or her; such mandatories must have written authorityand must lodge that authorisation with the interim trustee before the
   commencement of the meeting.

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Quorum

A single creditor provides a quorum for the meeting.

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Procedure at the meeting

The interim trustee will open the meeting.

1. Creditors' claims

The interim trustee will invite any creditors who have not already done so to submit their claims. Claims must be made using the proper form. The interim trustee will also ask whether any creditor wishes to amend a claim previously submitted.

An account, voucher or other original evidence of debt must support every claim. The interim trustee will make a record of the document, initial it and, if requested, return it to the creditor

The interim trustee may accept or reject, wholly or in part, all claims submitted at or before the meeting.

(Note - The acceptance of or the rejection of a claim by the interim trustee for thepurposes of voting at the statutory meeting does not necessarily imply that the claim will be either admitted or rejected for the purposes of determining a creditor's entitlement to a dividend.)

2. Election of chairperson

The interim trustee will invite the creditors present to elect one of their number to chair the meeting and preside over the election of a permanent trustee. If no one is elected, the interim trustee will continue to chair the meeting.

3. Report by the interim trustee

The interim trustee must make a copy of the debtor's statement of assets and liabilities available for inspection. Also they must provide their own statement of the debtor's financial affairs.

The interim trustee will answer any questions and consider any representations put to them regarding the debtor's assets, business or financial affairs or their conduct in relation to these.

After considering any representations made to them, the interim trustee will indicate whether or not, in their opinion, the debtor's assets are likely to be sufficient to enable a dividend to be paid to preferred and ordinary creditors.

(Note - If the interim trustee receives any information making it necessary to revise statement of affairs they will do so and, as soon as possible after the meeting, will send a copy of the amended statement to all known creditors.)

4. Election of permanent trustee

The chairperson will ask the creditors to nominate a permanent trustee.

(Notes: A nominee must be a qualified insolvency practitioner who has no prior business relationship with the debtor, who has no interest opposed to those of the creditors and who has given a written undertaking to act as permanent trustee if so elected.

It is not competent to nominate the Accountant in Bankruptcy as permanent trustee - see paragraph 6 below.

Only those creditors whose claims have been accepted by the interim trustee are entitled to vote in the election of a permanent trustee.)

If a permanent trustee is elected, the interim trustee will report the proceedings at the meeting to the sheriff. Within 4 days after the meeting, the debtor, any creditor, the interim trustee, the permanent trustee elect or the Accountant in Bankruptcy may object to any matter connected with the election but in the absence of any such objection the sheriff will confirm the election and issue an act and warrant to the permanent trustee.

5. Election of commissioners

If a permanent trustee is elected, the chairman will invite the creditors to nominate one or more (but not more than 5) of their number to serve as commissioners. The election of commissioners is not essential and if no commissioners are elected, the functions which would have fallen to them will devolve instead upon the Accountant in Bankruptcy.

Commissioners can only act if the permanent trustee is elected.

6. Appointment of permanent trustee

If there is no election of a permanent trustee, the interim trustee will report the circumstances to the sheriff who will proceed to appoint the interim trustee to be the permanent trustee.

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Voting

A majority in value of the creditors voting decides all votes of creditors.

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Objections

Any person objecting to anything done or decided by the chairman of the meetingmay appeal to the sheriff.

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Adjournment of meeting

If no creditors appear within 30 minutes of the published time for the meeting, theinterim trustee will close the meeting and immediately apply to the sheriff for theirown appointment as permanent trustee.

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Further Information

Further information may be obtained from us at:

Accountant in Bankruptcy
PO Box 8313
Irvine
KA12 2AA
LP - 4 Irvine
E-mail: helpline@aib.gov.uk
Telephone helpline: 0845 7626171
(calls charged at local rates)

Disclaimer:

The information given on this page is for general guidance only. It is not a detailed or full statement of law.

© Accountant in Bankruptcy - Updated September 2003