The bankruptcy of any debtor represented by a private person or company is certainly accompanied by the need to notify creditors about this process. To do this, information is posted in open sources, and direct notifications are sent. Lenders have the right to separately put forward different claims for existing obligations to the debtor. So that the procedure is not dragged out, a special collegial structure is formed, called the meeting of creditors. It is vested with special powers to protect the interests of both creditors and debtors. It is at the meeting that the most significant and important decisions are made.
Powers and composition of the structure
All creditors may attend the meeting. Moreover, all participants are divided into two groups:
- persons with the right to vote, therefore, they vote for the adoption of a decision;
- creditors not authorized to vote.
The first group includes bankruptcy creditors and various government agencies. Their requirements must be entered in the register of requirements.
Employees of the company to be closed, state control and supervisory authorities and self-regulatory organizations, from which the arbitration manager is selected, do not vote. These persons may participate in discussions, but do not vote for certain decisions.
What actions are being performed?
At a meeting of creditors a large number of different decisions are made. They allow you to restore the solvency of the debtor or to conduct bankruptcy proceedings. Each decision should be directed to the return of funds to creditors. During the first meeting of creditors or subsequent meetings, different decisions may be made:
- the introduction of a financial recovery process or external management, which allows to improve the financial position of the debtor, which often leads to the fact that he independently manages his debts, therefore, it is not required to conduct bankruptcy proceedings;
- approval of the reorganization project and schedule, on the basis of which debts will be repaid by the debtor;
- adoption of an external management plan;
- if there are signs that the debtor can actually cope with the debts without selling the property, an amicable agreement is drawn up;
- petitioning the court to declare the debtor bankrupt and begin bankruptcy proceedings;
- drawing up an additional list of requirements for managers;
- selection of SRO and arbitration manager;
- control over the activities of the manager;
- appointment of a registrar from the list of SROs;
- organization of a committee of creditors;
- expanding the authority of this meeting;
- appointment of a representative.
If the meeting of creditors considers that the previously appointed manager does not cope with his duties, then it is possible to remove him from his post, after which a new specialist is appointed.
How is it convened?
It is the appointed arbitration manager who prepares and conducts the meetings. Additionally, a request for holding may be put forward by a committee of creditors, voting members or other creditors if their number exceeds one third of all members of the meeting.
When drawing up the requirements, the issues that will be discussed must be indicated. If the initiator is the committee or the participants themselves, the arbitration manager does not have the right to change issues.After receiving notice from the creditors, the manager must prepare for the meeting of creditors within three weeks. Dates may increase if there are good reasons.
How are notified?
The general meeting of creditors requires the greatest possible number of participants included in the register. Therefore, all these individuals receive special notifications. They are mailed two weeks before the immediate meeting. It is allowed to use other methods for notification, but the information must be received by the addressee five business days before the appointed event.
If there is no opportunity to notify each creditor or the number of participants exceeds 500 people, then information about the event is published in open sources.
The notice must contain the following information:
- name and address of the debtor;
- the date and place of the meeting, and there should not be any obstacles to its attendance;
- agenda;
- registration procedure for each participant;
- rules on the basis of which participants will get acquainted with the prepared materials.
Information about the event is entered into the bankruptcy register 2 weeks before the appointed date.
Summarizing
The meeting of creditors of the debtor shall be considered competent only on condition that at least half of all creditors in the register are present at it. The number of votes depends on the number of financial claims. This includes not only direct debts, but also various penalties, interest on arrears and other sanctions that are repayable along with ordinary debts.
Often, in a bankruptcy case, there is only one creditor. He single-handedly makes all decisions in this matter. Decisions made can be canceled by the court if they violate the rights of other participants or the results of the event are incorrectly drawn up.
Protocol nuances
Holding a meeting of creditors involves maintaining the minutes of the meeting. The rules for its formation include:
- made in duplicate;
- a lot of applications are formed to it, which include ballots for voting, documents on the presence of powers of participants and other materials;
- one copy submits to the court within 5 days after the end of the event;
- Information about the document is entered into the bankruptcy register within 5 days.
It is the arbitration manager who takes care of the preparation and conduct of the meeting.
The specifics of the first meeting
The first meeting of creditors is considered the most important in the entire bankruptcy procedure of any debtor. Its features include:
- Only a temporarily appointed manager is engaged in convening and conducting, so the process is carried out in the process of observation;
- there is a certain time frame for such an event, so it should be carried out 10 days before the completion of the monitoring procedure;
- the minutes of the meeting with the report of the manager is sent to the court within 5 days after the event.
The first meeting of creditors is not convened if the register only includes requirements from employees of the company for salaries or severance pay. Under such conditions, only the court decides whether the assembly will be used or not.
What issues are considered at the first meeting?
The first meeting of creditors is considered the most important event in the entire bankruptcy procedure. This is due to the fact that it addresses numerous significant issues. These include:
- drawing up a petition in court on the use of any stage of bankruptcy;
- formation of a committee of creditors;
- scheduling reorganization and debt reduction;
- identification of the main requirements for the manager;
- selection of candidates and SROs;
- definition of a registry holder;
- formation of a settlement agreement;
- deciding on debt restructuring.
Many lenders are sure that at the first meeting an additional priority is established, on the basis of which debts are repaid. But in fact, this procedure is carried out according to the requirements of the law, and not at the request of creditors.
Nuances of re-meetings
The need for them arises if there are no lenders in the right amount at the first meeting or if decisions taken are recognized unauthorized for various reasons. At least 30% of creditors must be present at the event, the requirements of which are contained in the register.
All participants must be duly informed of the appointed meeting. Decisions at a repeat event are made on the basis of voting, for which purpose all previously received ballots are filled in.
The dates during which further meetings are held are not determined at the legislative level, therefore meetings can be held in case of various problems or to solve certain problems.
Who can participate?
Participation in the meeting of creditors is allowed only for a limited number of persons defined by law. These include bankruptcy creditors, organizations with voting rights, as well as state bodies and private individuals who cannot vote, but may require certain cash from the debtor.
The presence of the debtor is optional. The eligibility of the meeting depends on the number of participants vested with the right to vote.
What rights are given to participants?
The rights of the meeting of creditors are numerous. But the most important features include:
- important decisions are made regarding financial recovery, bankruptcy proceedings or the drafting of a settlement agreement;
- an arbitration manager is selected or replaced;
- the work of a specialist is monitored;
- various petitions are sent to the court;
- The results of decisions taken are evaluated.
Due to the participation of creditors in the bankruptcy process of the debtor, it is possible to really satisfy the requirements of all interested parties.
Is it possible to conduct in absentia?
It is allowed by law to hold meetings in absentia, so the personal presence of creditors is not required. For this, electronic voting is carried out through special communication channels. Operators ensure that voting is kept confidential.
The minutes of the meeting are signed by the manager or organizer. When compiling notifications, a link to the site where there is data on the planned event is included. Notifications are sent to creditors 30 days before the due date.
Dates
The first meeting is held 10 days before the end of the observation period.
In the future, such enterprises are usually held every three months, but if urgent issues arise, the process is allowed to be carried out much more often. If an extraordinary meeting is required, the request is drawn up by the creditors, after which the manager responds to it within three weeks.
Reasons to postpone
The meeting may be postponed if an appropriate decision of the arbitral tribunal is adopted. Usually, the reason for such a decision is that there are still claims that have not been considered in court.
It is even allowed to hold a meeting in the presence of a court refusal, but there must be good reason for this, affecting the bankruptcy procedure of the debtor.
When is the meeting invalid?
The correctness and lawfulness of bankruptcy should be monitored by arbitration managers. The meeting of creditors may be declared invalid in situations:
- infringe the rights of participants in the event or third parties;
- less than half of the participants;
- the creditor, having 10% of the claims, did not receive notification of the event, and he has evidence of this fact.
Not only the creditors themselves, but also the debtor or his representatives can appeal the decisions taken at the meeting.Any decision may be reviewed by the court, and especially with regard to bankruptcy proceedings or external management. Under such conditions, a new meeting is usually urgently convened, where all changes made by the court or the administrator are evaluated.
Conclusion
Bankruptcy of any debtor represented by a company or individual is considered a complex process. It is monitored by all creditors who wish to receive their funds. Therefore, they hold special meetings at which important decisions are made regarding the recognition of the debtor insolvent.
The first meeting is considered the most important, and it is the creditors who can determine the requirements for the arbitration manager. They can change his decision or influence the debtor. Decisions made by creditors are not always satisfied by the court. The timing of the event depends on the circumstances of the particular bankruptcy case.