If a trade supplier receives a Notice of a Creditors’ Meeting it means bad news. The money owing to the creditor is in jeopardy.
On receipt of the notice, check to see if it is valid. Under the Companies Acts, the notice must be sent at least 10 days prior to the date of the meeting. The notice must be accompanied by proxy forms. (The proxy forms are important; the Directors will seek to control the meeting with proxies in their favour).
The notice must also be advertised in two daily newspapers circulating in the vicinity of the registered office or principal place of business of the company. Purchase a copy of all such newspapers, promptly. A failure to comply with this obligation will undermine the validity of acts done at the Creditors’ meeting. (The advertisement is intended to alert creditors who have not received notice in the post; if they had attended they could have altered the outcome of the meeting). It is a criminal offence to fail to give proper or adequate notice of the meeting.
The company will have appointed a liquidator at the members’ EGM. That liquidator will attend the Creditors’ meeting. The creditors may propose a different person as liquidator. If a majority of creditors carry that proposal, the “company’s liquidator” will be supplanted by the new nominee. There should not, of course, be a “company’s liquidator”; a liquidator is required by law to be independent of the company or its directors.
Creditors should prepare for the Creditors’ meeting. At McGarr Solicitors we will advise on the questions to be asked by creditors at the meeting and will attend to represent the interests of creditors if asked to do so.