Bankruptcy Meetings are usually called by the Trustee in Bankruptcy who administers the bankrupt estate. The Bankruptcy Act stipulates very strict rules and procedures for meetings of creditors. A bankruptcy meeting will be chaired by a meeting president (the person who runs and controls the meeting) and the dialogue at the meeting will be recorded by a minute secretary. The minutes secretary will prepare and sign minutes of the meeting. Both the meeting president and the minutes secretary need to be appointed by the creditors. Usually the Trustee in Bankruptcy is appointed as the meeting president, however, creditors can appoint an independent person to act as the meeting president.
Why are Meetings of Creditors held?
Meetings are usually held for more complex bankrupt estates. A Trustee in Bankruptcy may call a meeting of creditors to discuss the progress of the estate and to have creditors consider and pass any necessary resolutions. For example, if a Trustee in Bankruptcy was considering to commence complex litigation, the Trustee in Bankruptcy may consider calling a meeting of creditors to obtain the views of creditors. It is important to note however, that whilst the Trustee in Bankruptcy will in most cases consider the views of creditors, the Trustee does not need to follow the decision of creditors.
Can a creditor call a meeting of creditors?
If a creditor either individually or collectively wishes to call a meeting of creditors and have 25% of the total claims then they can request that the Trustee in Bankruptcy call the meeting. If any creditor who hold less than 25% of the votes wish to call a meeting of creditors then they will need to pay the trustee for the cost of holding the meeting (Section 64(1) of the Bankruptcy Act).
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