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Meeting of Creditors

creditor, vote, security, value, person, proof, debt, respect, debtor and unless

MEETING OF CREDITORS. After a receiving order has been made against a debtor he is not immediately adjudged a bankrupt, but a meeting of creditors is held shortly afterwards to consider whether a proposal for a composition or a scheme of arrangement shall be entertained or whether he shall be adjudged bankrupt.

The following are some of the rules in the first schedule of the Bankruptcy Act, 1883, with respect to meetings of creditors : " 1. The first meeting of creditors shall be summoned for a day not later than fourteen days after the date of the receiving order, unless the Court for any special reason deem it expedient that the meeting be summoned for a later day.

" 2. The official receiver shall summon the meeting by giving not less than seven days' notice of the time and place thereof in the London Gazette and in a local paper.

" 3. The official receiver shall also, as soon as practicable, send to each creditor men tioned in the debtor's statement of affairs, a notice of the time and place of the first meeting of creditors, accompanied by a summary of the debtor's statement of affairs, including the causes of his failure, and any observations thereon which the official receiver may think fit to make ; but the proceedings at the first meeting shall not be invalidated by reason of any such notice or summary not having been sent or received before the meeting.

" S. A person shall not be entitled to vote as a creditor at the first or any other meeting of creditors unless he has duly proved a debt provable in bankruptcy to be due to him from the debtor, and the proof has been duly lodged before the time appointed for the meeting.

" 9. A creditor shall not vote at any such meeting in respect of any unliquidated or contingent debt, or any debt the value of which is not ascertained.

" 10. For the purpose of voting, a secured creditor shall, unless he surrender his se curity, state in his proof the particulars of his security, the date when it was given, and the value at which he assesses it, and shall be entitled to vote only in respect of the balance (if any) due to him, after deducting the value of his security. If he votes in respect of his whole debt he shall be deemed to have surrendered his security unless the Court on application is satisfied that the omission to value the security has arisen from inadvertence.

" 1 1 . A creditor shall not vote in respect of any debt on or secured by a current bill of exchange or promissory note held by him, unless he is willing to treat the liability to him thereon of every person who is liable thereon antecedently to the debtor, and against whom a receiving order has not been made, as a security in his hands, and to estimate the value thereof, and for the pur poses of voting, but not for the purposes of dividend, to deduct it from his proof.

" 12. It shall be competent to the trustee or to the official receiver, within twenty-eight days after a proof estimating the value of a security as aforesaid has been made use of in voting at any meeting, to require the creditor to give up the security for the benefit of the creditors generally on payment of the value so estimated, with an addition thereto of twenty per centum. Provided, that where

a creditor has put a value on such security, he may, at any time before he has been required to give up such security as afore said, correct such valuation by a new proof, and deduct such new value from his debt, but in that case such addition of twenty per centum shall not be made if the trustee requires the security to be given up.

" 13. If a receiving order is made against one partner of a firm, any creditor to whom that partner is indebted jointly with the other partners of the firm, or any of them, may prove his debt for the purpose of voting at any meeting of creditors, and shall be entitled to vote thereat.

" 14. The chairman of a meeting shall have power to admit or reject a proof for the purpose of voting, but his decision shall be subject to appeal to the Court. If he is in " (2) The directors shall, at least seven days before the day on which the meeting is held, forward a report (in this Act called ' the statutory report ') to every member of the company and to every other person entitled under this Act to receive it." The statutory report shall state, amongst other things, the total number of shares allotted, the total amount of cash received by the company in respect of all shares allotted, an abstract of the receipts on account of capital, whether from shares or debentures and of the payments made there out, and the names, addresses, and descrip tions of the directors, auditors (if any), managers (if any), and secretary of the company.

doubt whether the proof of a creditor should be admitted or rejected he shall mark the proof as objected to and shall allow the creditor to vote, subject to the vote being declared invalid in the event of the objection being sustained.

" 15. A creditor may vote either in person or by proxy.

" 17. A creditor may give a general proxy to his manager or clerk, or any other person in his regular employment. In such case the instrument of proxy shall state the rela tion in which the person to act thereunder stands to the creditor.

" 19. A proxy shall not be used unless it is deposited with the official receiver or trustee before the meeting at which it is to be used.

" 26. No person acting either under a general or special proxy shall vote in favour of any resolution which would directly or indirectly place himself, his partner or employer, in a position to receive any re muneration out of the estate of the debtor otherwise than as a creditor rateably with the other creditors of the debtor. Provided that where any person holds special proxies to vote for the appointment of himself as trustee he may use the said proxies and vote accordingly." (See Acrs OF BANKRUPTCY, BANKRUPTCY, PUBLIC EXAMINATION OF DEBTOR, RECEIVING ORDER.)