As you will most probably be aware, the new insolvency rules shift the focus away from physical creditors’ meetings, instead moving towards virtual meetings, which can either be done over the telephone or video conferencing (such as Skype), or by way of “deemed consent” which gives creditors up to a certain date to object to the method of the liquidators’ appointment.
However, it’s important to remember that if creditors who hold either 10% of the total value of creditor claims, or 10% of the total number of creditors, or 10 individual creditors object to either of these proposed methods of appointment, then a physical meeting of creditors must then be convened.
Understandably, these changes have caused some confusion and concern for some creditors, who feel that they have no recourse as to their rights in the liquidation and are unaware of what steps they can take within the process. Where previously they had a clear forum in which to question the contents of the report and raise concerns to be investigated, they are now uncertain of their position and rights once a liquidator is appointed.
Furthermore, during an insolvency creditors may feel aggrieved at the lack of correspondence regarding the case, particularly those who have been involved in the process before. Under the new rules, creditors are informed at the start of the process where they can review the current status (by way of a website address) and told to check the website for the progress of the proceedings.
The rationale for the implementation of the new rules was to save costs and improve dividend prospects to creditors, not to remove creditor involvement.
As can be gathered from the above points, creditors must be particularly savvy to ensure they’re aware of the new rules and what they are and are not entitled to.
As Insolvency Practitioners, we have an in-house creditor services team – whom are all well experienced with the insolvency process, and able to review the insolvency from a creditors’ perspective, ensuring your client is protected.
The demand for Cowgill Holloway Creditor Services has been rising increasingly over recent years, and following the recent rule changes and the reduction in creditor involvement, we’re placing even more importance upon it.
Should you have a client who has recently received correspondence regarding a customer of theirs entering into insolvency proceedings, we suggest giving us a call to discuss it in more detail – we’re offering this service to our accountancy contacts as a gesture of goodwill to further assist their clients.
Our team will review the report contents and provide strategic advice and guidance on any notable or contentious points. This will include identifying relevant questions and / or investigatory points to ask the proposed liquidator, including guidance as to whether they meet the criteria to request a meeting and whether they will benefit from doing so.
This service will provide your client with the comfort and re-assurance that they are being represented correctly.
For more information about Cowgill Holloway Creditor Services, email Jordan Heys at jordan.heys@cowgills.co.uk.
Disclaimer
The information was correct at time of publishing but may now be out of date.
