Rule 1.16 of The Insolvency Rules 1986 - Company Voluntary Arrangements (CVAs)

Rules as to Attendance By Company Directors at CVA meetings of shareholders & creditors

 

 

At CVA meetings (of shareholders & creditors) company directors have to be notified of the details of the meetings called to consider a Company Voluntary Arrangement proposal. However the insolvency practitioner acting as Nominee can then exclude certain or all of the directors from actually attending at the meeting. Rule 1.16 of The Insolvency Rules 1986 does therefore give the insolvency practitioner, acting as the Nominee under the CVA, power to manage certain of the possible attendees at shareholder and creditor meetings.

 

The actual wording of Insolvency Rule 1.16 is shown below in bold.

 

Chapter 5 - Insolvency Rules 1986 - Rule 1.16 - Attendance by Company officers (At CVA meetings of shareholders & creditors)

 

(1) At least 14 days' notice to attend the meetings shall be given by [the nominee] —

(a) to all directors of the company, and

(b) to any persons in whose case [the nominee] thinks that their presence is required as being officers of the company, or as having been directors or officers of it at any time in the 2 years immediately preceding the date of the notice.

(2) The chairman may, if he thinks fit, exclude any present or former director or officer from attendance at a meeting, either completely or for any part of it; and this applies whether or not a notice under this Rule has been sent to the person excluded.

 

 

A CVA proposal can be proposed by the directors, liquidator or administrator of the company concerned. When that company is already in liquidation or administration it can be seen that certain directors could be disruptive influences at Company Voluntary Arrangement (CVA) meetings. Insolvency Rule 1.16 provides the nominee with the necessary powers,

- to notify directors of the CVA meetings, and

- to require certain past directors (and the company secretary) to attend at the CVA meetings, and

- to exclude any company officer from the meetings.