Creditors meetings – are they worth attending?

If you are in business, you may have received notification that a meeting of creditors is due to take place of someone who owes you money.  Often the timing and location of the meeting are inconvenient and so all you do is to file the notice in the bin and hope that before you retire you might just get a cheque to soften the blow.  But perhaps you should think twice before doing this – after all, many directors and debtors actually hope that you will do nothing about it as it helps them to avoid difficult questioning and potential claims for their actions.

A creditors meeting is often the one and only chance when creditors get an opportunity to get their feelings off their chest.  A director of your failed customer has to attend and answer your questions and some meetings can get very heated.  However, two potential benefits of having creditors present or represented at such meetings are:

• The Insolvency Practitioner convening the meeting has limited information about the activities of the debtor and up to then, will have only heard the directors’ side of the story.  It is amazing what additional information comes out at these meetings.
• At most of these meetings, the directors have chosen who they want to appoint as liquidator.  However if the creditors want someone else to act as liquidator, they can appoint someone in place of the directors’ choice – and the creditors’ choice will prevail.  Whilst all Insolvency Practitioners are supposed to be independent, there is an added layer of independence if the creditors’ choice is left in charge.

There are many actions which a liquidator can pursue against directors and debtors generally.  If they are successful, it means that the amount available to distribute to you and the other creditors is increased.  By throwing that notice in the bin and not using your proxy, you might be limiting your chances of getting paid even further.

You do not have to be present in person.  You can send a representative and that includes a licensed Insolvency Practitioner who knows which questions to ask and which buttons to press.  Within reason, we are happy to represent you at such meetings free of charge or to accompany you if you feel uncomfortable about going by yourself.  Is that not worth the effort of pulling that notice out of the bin and giving us a call?

To visit O'Hara & Co, please click here.