Rule 1.15 of The Insolvency Rules 1986 - Company Voluntary Arrangements (CVAs)

Chairman cannot use general proxies to increase the remuneration of the nominee or supervisor

 

As the Chairman of the creditors meeting is usually an insolvency practitioner (acting in his capacity as Nominee) it would be clearly improper if that person could use general proxies to increase the fees (remuneration) of himself as the Nominee and / or the proposed Supervisor. Insolvency Rule 1.15 is designed to avoid abuse by the insolvency practitioner concerned to prevent him increasing his fee basis without specific authority.

 

The actual wording of Insolvency Rue 1.15 is shown below in bold.

 

Chapter 5 - Insolvency Rules 1996 - Rule 1.15 - The chairman as proxy-holder

The chairman shall not by virtue of any proxy held by him vote to increase or reduce the amount of the remuneration or expenses of the nominee or the supervisor of the proposed arrangement, unless the proxy specifically directs him to vote in that way.

 

In Company Voluntary Arrangements (CVAs) Insolvency Rule 1.15 prevents insolvency practitioners improperly increasing their fee basis. This is achieved  by the Rule requirement that the Chairman of the CVA meetings of shareholders cannot use general proxies to increase or amend the fee / remuneration basis.