Creditor Meeting Questions
Whilst physical creditor meetings are mostly a thing of the past, virtual creditors meeting are sometimes held, where the insolvency practitioner considers it appropriate (often being in cases with lots of creditors or creditors whom it is considered wish to have an input in the voting in person). Physical creditors meetings are also held where creditors are not happy with the liquidation resolutions being proposed by a postal decision and therefore a requisite majority of creditors request that they be sought by way of a physical meeting. In light of this, here are my list of the most commonly asked questions at creditors meetings:-
- When did you know the Company was insolvent?
- Was trading continued after the date you became aware the Company was insolvent, if so, provide details?
- Have you set up another company doing the same thing for going forward with?
- What credit was obtained since you became aware that the Company was insolvent?
- You have X amount of assets in your last set of accounts, but limited assets in your Statements of Affairs, what happened to these assets? (i.e. what assets were sold off in the final period of trading and was it for a fair sum?).
- What events or issues caused the failure of the Company?
- What were the responsibilities of each director regarding the management and control of the business?
- Have you ever had any previous insolvencies?
- Please provide details of any inter-company trading?
- What attempts were made to turn the business around?
- Were records up to date and were management accounts done?
- Are there any debts for which you have signed a personal guarantee and have any been recently paid off?
- Specific creditor events – e.g. why was I advised that payment was pending or given a cheque which bounced?
- Did you have any valid reason to believe that the Company’s fortunes would change?
- What qualifications and or experience do you have which enable you to perform the duties required of a director?
- Specific to the creditor’s debt – e.g. why was X amount ordered from them the week before the notices of the creditors meeting were sent?
- Preferences e.g. how was it decided what order each creditor would be repaid in?
- Have you had any prior dealings with the nominated insolvency practitioner?
- What remuneration, drawings or loan repayments have you taken out of the business?
- Proof of debts and proxy queries – e.g. questions re validation of claims and voting amounts.
Any director whom is being asked to attend either a virtual creditors meeting or a physical meeting to consider the liquidation resolutions for their insolvent company should review the above and prepare responses in readiness for the meeting so they are fully prepared ahead of time.
Directors should also note that it is perfectly fine to say that you don’t know the answer to a question if you genuinely don’t as not all directors can answer every on of the questions raised above. In which case it is better to not guess at and answer and provide a commitment to find out and let them know, after the meeting. Should a creditor be unhappy with not knowing the answer to their question there and then, there is an option to adjourn the meeting for up to an hour where the answers can be found and the meeting then re-sat and considered once known.
If you would like more guidance on creditors meetings or general advice about what may be asked at creditors meetings then please feel free to contact this office on 01788 544 544.
Categorised in: Administration News, Insolvency Reviews & Advice, Latest Insolvency News, Liquidation News
