Creditors have many rights during a formal insolvency procedure. Whether a company is in liquidation, administration or some other insolvency procedure the rights of creditors are similar and include:
- Creditors have the right to be asked to attend meetings. The frequency of meetings varies with the type of insolvency process. Creditors also have the right to ask the liquidator to summon a meeting of creditors in order to discuss or receive information on a particular aspect of the process.
- The right to be kept informed of progress with the insolvency. The liquidator or administrator will send out annual progress reports that will explain the work that has been done, the assets sold, the costs incurred and the amount of cash in hand that can be used to pay a dividend to creditors.
- Details of the liquidator or administrator's remuneration, what it represents and what work has been done. Creditors can apply to the court if they believe that the costs are excessive.
- Creditors can also ask to join a creditors' committee which has greater involvement with the insolvency process. The committee must have between three and five members and can assist the liquidator or administrator to carry out his functions.
- Creditors also have the right to appoint their own liquidator or administrator if they feel that there are matters that require investigation that are not being adequately addressed.
Gore and Company can advise on the rights of creditors and the process involved in obtaining more detailed information from a liquidator or administrator.
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