Schedule B1 para 51(1) IA 1986 states as soon as practicable
after appointment and no later then ten weeks after the company
enters administration, the administrator must provide creditors
with a statement of the proposals for achieving the purpose of
administration.
Creditors may modify the proposals, but the administrator
must agree the modifications. If the administrator does not agree,
the proposals are deemed to be rejected and the administrator must
apply to the court for directions. The court may terminate the
administration and an alternative, such as liquidation may be
implemented.
However, 51(1) does not apply where the administrator states
that he thinks;
the company has insufficient property to enable a distribution
to be made to unsecured creditors (other than from any prescribed
part of floating charge realisations, see INS9614).
The administrator must however summon an initial
creditors’ meeting where requested by creditors with at least
10% of the total debts of the company. Such a request must be made
on the appropriate form within 12 days of the administrator’s
statement of proposals being sent out. The applicant must provide
security for the costs of the meeting.
The meeting must then be held within 28 days of the
administrator's receiving the notice, unless the court extends the
period on an application by the Administrator. .
Schedule B1 para 56 also creditors for 10% or more of the
total debts of the company to request a further meetings at any
time, subject to depositing funds to secure the costs. The deadline
for such a meeting is again 28 days from receipt of the request.
(The administrator cannot apply to the court to extend this
deadline). An administrator who fails to call a further meeting
without reasonable excuse commits an offence.
Anything which is required or permitted to be done at a
creditors’ meeting may be done by correspondence, subject to
rule 2.48.
This allows the administrator to seek a postal resolution
with a closing date of at least 14 days from the date of issue. If
the resolution is approved business may continue by correspondence.
If it is not, the administrator must call a meeting of creditors.
Creditors who receive a resolution to conduct business by
correspondence may also require the administrator to summon a
meeting specifically to consider the issue, if their debts amount
to 10% or more of the total debts of the company . They must
deposit sufficient funds with the administrator to cover the costs
of the meeting. They must do this within 5 business days of the
administrator sending out the resolution.
