Rule 1.11 of The Insolvency Rules 1986 - Company Voluntary Arrangements (CVAs)
How to summon CVA meetings of shareholders & creditors under Section 3 of The Insolvency Act 1986
Insolvency Rule 1.11 sets out how the responsible insolvency practitioner must call the meetings of creditors and shareholders to consider and vote on the approval or otherwise of the Company Voluntary Arrangement proposal.
The actual wording of Insolvency Rule 1.11 is shown below in bold.
Insolvency Rules 1986 - Rule 1.11 - Summoning of meetings under Section 3 (Of The Insolvency Act 1986)
(1) The responsible insolvency practitioner shall fix a venue for the creditors' meeting and the company meeting, and give at least 14 days' notice of the meetings—
(a) in the case of the creditors' meeting, to all the creditors specified in the company's statement of affairs, and to any other creditors of [ whose address the insolvency practitioner is otherwise] aware; and
(b) in the case of the company meeting, to all persons who are, to the best of his belief, members of the company.
(2) Each notice sent out under this Rule shall state the effect of Rule 1.19(1), (3) and (4) (requisite majorities (creditors)); and with it there shall be sent—
(a) a copy of the responsible insolvency practitioner's proposal, and
(b) a copy of the statement of affairs or, if he thinks fit, a summary of it (the summary to include a list of creditors and the amounts of their debts)
Insolvency Rule 1.11 provides not only the amount of notice that must be given for the meetings but also the creditors and shareholders must be provided with details of how the voting works (the "requisite majorities" under Rule 1.19) at the two meetings. This is to provide creditors and shareholders in advance with knowledge of how votes are counted at the respective meetings. The objectives of Insolvency Rule 1.11 are,
- to provide creditors and shareholders with adequate notice of the forthcoming meetings, and
- to provide those same parties with full information as to what is "proposed" under the Company Voluntary Arrangement (CVA) proposal
- to provide creditors and members with advance knowledge of how the voting system works at the respective meetings.