Holding creditors' meetings
The meetings called during voluntary administration and liquidation proceedings
Strict guidelines govern how creditors' and shareholders' meetings must be called, advertised, held and reported on during voluntary administration and liquidation proceedings.
Creditors' meetings during voluntary administration
An administrator must call and advertise:
- a first creditors' meeting, and
- a watershed meeting at which creditors vote to decide the future of your company.
First creditors' meeting
The first creditors' meeting must be held within 8 working days of the administration beginning.
The administrator must call a first creditors' meeting to:
- decide whether to appoint a creditors' committee and,if so, appoint its members and decide whether to replace the administrator, and
- table an interests statement disclosing whether the administrator, or their firm, has a relationship with your company.
The administrator must, within 5 working days before every creditors' meeting:
- give written notice of the meeting to as many of your company's creditors as possible, and
- advertise the meeting in at least 1 newspaper in circulation in the area where your business is located.
Watershed meeting
Company directors are required to attend a watershed meeting at which your creditors vote to decide:
- the future of your company and,
- in particular, whether your company and creditors will enter into a deed of company arrangement.
The administrator must convene a watershed meeting within 20 working days after the date of their appointment. This period can be extended by the court.
The watershed meeting must be held within 5 working days from the end of that 20 day period, unless an extension has been granted.
Not less than 5 working days before the watershed meeting, the administrator must:
- give written notice of the meeting to as many of your company's creditors as possible, and
- advertise the meeting in at least 1 newspaper in circulation in the area where your business is located.
Documents accompanying the notice of watershed meeting
The administrator must attach to the notice of watershed meeting a report about:
- your company's business, property, affairs and financial circumstances
- any other information to be discussed at the creditors' meeting, and
- a statement setting out the administrator's opinion, with reasons for that opinion, about whether it would be in your creditors' interests for your company to:
- execute a deed of company arrangement
- be placed in liquidation, or
- end the administration.
Creditors' meetings during liquidation
During liquidation, a creditors' meeting is generally only called if the liquidator believes it will assist them to investigate your company's business and financial affairs.
A liquidator may call a creditors' meeting to:
- inform creditors and shareholders about the progress of the liquidation
- give creditors an opportunity to raise and discuss issues relevant to the liquidation
- identify any previously undiscovered assets owned by your company
- identify the causes of your company's failure
- allow creditors to decide whether to appoint a committee to oversee the liquidation.
Time limits on calling creditors' meetings
The liquidator must call a first creditors' meeting within:
- 30 working days of their appointment, for court ordered liquidations, or
- 10 working days of their appointment for all other liquidations.
In either case, the court may extend the time limit for calling the first creditors' meeting.
When creditors' meetings won't occur
A liquidator doesn't need to call a creditors' meeting if up to 20 days before liquidation starts, your board resolves that:
- it will, on appointment of a liquidator, be able to pay the company's debts, and
- sends a copy of that resolution to the Companies Office.
When creditors can call a meeting
If the liquidator doesn't call a creditors' meeting, they must give notice of that decision to creditors. Creditors then have 10 working days from receiving that notice to ask that a meeting be called.
If creditors ask for a meeting, the liquidator must:
- call a creditors' meeting within 15 working days of their request, and
- give creditors at least 5 working days' notice that a meeting will be held by:
- sending written notice along with a copy of the liquidator's report, and
- publishing a public notice in at least 1 newspaper in circulation in the area where your business is located.