Statement of Insolvency Practice 12 (E&W)
Records of Meetings in Formal Insolvency Proceedings
This statement of insolvency practice is one of a series issued by the Council of the Society with a view to harmonising the approach of members to questions of insolvency practice. It should be read in conjunction with the Explanatory Foreword to the Statements of Insolvency Practice and Insolvency Technical Reminders issued in June 1996. Members are reminded that SPI Statements of Insolvency Practice are for the purposes of guidance only and may not be relied upon as definitive statements. No liability attaches to the Council or anyone involved in the preparation or publication of Statements of Insolvency Practice.
This statement of insolvency practice concerns the keeping of records of meetings of creditors, committees of creditors, and members or contributories of companies in formal insolvency proceedings. The statement is in two parts. The first summarises the statutory provisions regarding the keeping of such records in the various types of insolvency appointment. The second sets out the minimum standards which should be observed with regard to such records in all cases as a matter of best practice.
The statement applies to England and Wales only. References to the Act are to The Insolvency Act 1986, and references to the Rules are to The Insolvency Rules 1986.
THE STATUTORY PROVISIONS
Meetings of Creditors - Administration
The chairman of the meeting shall cause minutes of its proceedings to be entered in the company’s minute book. The minutes shall include a list of the creditors who attended (personally or by proxy) and, if a creditors’ committee has been established, the names and addresses of those elected to be members of the committee. (Rule 2.28).
Meetings of Creditors - Administrative Receivership
The chairman of the meeting shall cause a record to be made of the proceedings and kept as part of the records of the receivership. The record shall include a list of the creditors who attended (personally or by proxy) and, if a creditors’ committee has been established, the names and addresses of those elected to be members of the committee. (Rule 3.15).
Meetings of Creditors and Contributories - Liquidation
At any meeting of creditors or contributories the chairman shall cause minutes of the proceedings to be kept. The minutes shall be signed by him/her and retained as part of the records of the liquidation. The chairman shall also cause to be made up and kept a list of all the creditors or, as the case may be, contributories who attended the meeting. The minutes of the meeting shall include a record of every resolution passed. In the case of compulsory liquidations, it is the chairman’s duty to see to it that particulars of all such resolutions, certified by him/her, are filed in Court not more than 21 days after the date of the meeting. (Rule 4.71).
Meetings of Creditors - Bankruptcy
The chairman at any creditors’ meeting shall cause minutes of the proceedings at the meeting, signed by him/her, to be retained by him/her as part of the records of the bankruptcy. He/she shall also cause to be made up and kept a list of all the creditors who attended the meeting. The minutes of the meeting shall include a record of every resolution passed. It is the chairman’s duty to see to it that the particulars of all such resolutions, certified by him/her, are filed in Court not more than 21 days after the date of the meeting. (Rule 6.95).
Meetings of Creditors and Members - Voluntary Arrangements
Where, in the case of a company, meetings of the company and its creditors are held under Section 3 of the Act, or, in the case of an individual, a meeting of creditors is held under Section 257 of the Act, a report of the meeting or meetings shall be prepared by the chairman. The report shall -
state whether the proposal for a voluntary arrangement was approved or rejected, and, if approved with what (if any) modifications;
set out the resolutions which were taken at the meetings, and the decision on each one;
list the creditors and, in the case of a company, the members of the company, (with their respective values) who were present or represented at the meetings, and how they voted on each resolution; and
include such further information (if any) as the chairman thinks it appropriate to make known to the Court.
Meetings of Committees of Creditors
At all meetings of committees of creditors established under the Act every resolution passed shall be recorded in writing, either separately or as part of the minutes of the meeting. A record of each resolution shall be signed by the chairman and kept with the records of the proceedings (or, in the case of administrations, placed in the company’s minute book). (Rules 2.42 (administration); 3.26 (administrative receivership); 4.165 (compulsory liquidation); 4.166 (creditors’ voluntary liquidation); 6.161 (bankruptcy)).
Where resolutions of the committee are taken by post, a copy of every resolution passed, and a note that the committees concurrence was obtained, shall be kept with the records of the proceedings (or, in the case of administrations, placed in the company’s minute book). (Rules 2.43 (administration); 3.27 (administrative receivership); 4.167 (liquidation); 6.162 (bankruptcy)).
The Act contains no provisions for the establishment of committees in voluntary arrangements, but the terms of a proposal may provide for the establishment of a committee and may lay down procedures for keeping a record of its proceedings.
Minutes as Evidence of Proceedings
A minute of proceedings at a meeting of creditors, or the members or contributories of a company, held under the Act or Rules, signed by a person describing him/herself as or appearing to be the chairman of the meeting, is admissible in insolvency proceedings without written proof. The minute is prima facie evidence that:
The meeting was duly convened and held,
All resolutions passed at the meeting were duly passed, and
All proceedings at the meeting duly took place
Records should be kept of all meetings of creditors, committees of creditors, or members or contributories of companies, held under the Act or Rules or under provisions contained in a voluntary arrangement approved by the creditors. The record should include, as a minimum, the following information:
The title of the proceedings
The date, time and venue of the meeting
The name and description of the chairman and any other person involved in the conduct of the meeting
A list, either incorporated into the report or appended to it, of the creditors, members or contributories attending or represented at the meeting
The name of any officer or former officer of the company attending the meeting if not attending in one of the above capacities
The exercise of any discretion by the chairman in relation to the admissibility or value of any claim for voting purposes
The resolutions taken and the decision on each one and, in the event of a poll being taken, the value or number (as appropriate) of votes for and against each resolution
Where a committee is established, the names and addresses of the members
Such other matters as are required by the statutory provisions applicable to the relevant insolvency procedure as set out in section 2 above or, in the case of a voluntary arrangement, by the terms of the proposal
Where a meeting has been asked to approve an office holder’s remuneration, the information provided to the meeting in support of that request should form part of, or be retained with, the record of the proceedings.
The record should be signed by the chairman and be either -
retained with the record of the proceedings, or
entered into the company’s minute book, with a copy retained with the record of the proceedings, whichever is appropriate. In the case of committee meetings a copy of the record should be sent to every person who attended, or was entitled to attend, the meeting.
Forms of proxy retained under Rule 8.4 and, where a poll is taken, the poll cards, should be kept with the record of proceedings.
Where a member is the office holder or is appointed office holder as a result of the proceedings at the meeting and has not him/herself acted as chairman of the meeting, he/she should endeavour to ensure that the record is signed by the chairman and complies with the above principles. If the member is not satisfied that the record signed by the chairman is an accurate record of the proceedings, he/she should either prepare his/her own record for his/her files or prepare a note for his/her files explaining in what respects he/she disagrees with the chairman’s record.
Issued August 1996