Section 3 Insolvency Act 1986 - Summoning of the creditors meeting - Company Voluntary Arrangements (CVAs)

How CVA shareholders' and creditors' meetings are called

 

Section 3 of The Insolvency Act 1986 prescribes the when and where  of the CVA creditors' meeting and who should be notified of that Company Voluntary Arrangement creditors meeting to consider the directors' proposal for a CVA. The prescribed activities form part of the nominee's duties in law as to summoning the meeting in a set way.

 

The actual wording of Section 3 of The Insolvency Act 1986 is shown in bold below.

 

3. Summoning of meetings

 

(1) Where the nominee under section 1 is not the liquidator or administrator, and it has been reported to the court that such meetings as are mentioned in section 2(2) should be summoned, the person making the report shall (unless the court otherwise directs) summon those meetings for the time, date and place proposed in the report.


(2) Where the nominee is the liquidator or administrator, he shall summon meetings of the company and of its creditors to consider the proposal for such a time, date and place as he thinks fit.


(3) The persons to be summoned to a creditors’ meeting under this section are every creditor of the company of whose claim and address the person summoning the meeting is aware.

 

 

Much case law has interpreted Section 3 of The Insolvency Act 1986. Examples include,

- the 2006 case of Turner & Newall about the failure to notify certain creditors.

- A 1995 case (Beverly Group PLC) concerning a CVA proposal that was sent to a creditor but not received by that creditor

- The county Bookshops Limited 2002 case concerning the meaning of "contingent creditor".

 

If you need free advice on Section 3 of The Insolvency Act 1986; the related case law; or concerning any aspect of Company Voluntary Arrangement (CVA) creditors' meetings then please contact us by submitting the form on the right hand side of this page.