Rule 1.17 of The Insolvency Rules 1986 - Company Voluntary Arrangements (CVAs)
Who is entitled to vote at CVA creditors meetings?
At creditors meetings called to consider a Company Voluntary Arrangement (CVA) Proposal there has to be Rules as who is entitled to vote at the meeting and for what sum. Insolvency Rule 1.17 provides that at CVA creditors' meetings,
- Creditors whose claims that are not liquidated claims (Ie claims that are subject to unconcluded litigation) can only vote for £1 even though their claim might be for a million pounds.
- The creditors claims have to be calculated at a specified date.
The actual wording of Insolvency Rule 1.17 is shown below in bold.
Insolvency Rules 1986 - Chapter 5 - Rule 1.17 - Entitlement to vote (creditors)
(1) Subject as follows, every creditor who was given notice of the creditors' meeting is entitled to vote at the meeting or any adjournment of it.
(2) Votes are calculated according to the amount of the creditor's debt as at the date of the meeting or, where the company is being wound up or is [in administration], the date of its going into liquidation or (as the case may be) [when the company entered administration]
(3) A creditor may vote in respect of a debt for an unliquidated amount, or any debt whose value is not ascertained and for the purposes of voting (but not otherwise) his debt shall be valued at £1 unless the chairman agrees to put a higher amount on it.
Insolvency Rule 1.17 provides the necessary rule to define the amount in respect of which individual creditors at a CVA creditors meeting can vote.