Liquidator Substituted After Chairman Found To Have Misconducted Creditors’ Meeting

The manner in which creditors’ meetings are conducted can often be as significant as the actual outcome of the meeting.  A good example of this can be seen from the recent High Court decision in In re Mountview Foods Ltd (In Voluntary Liquidation) [2013] IEHC 125.

A creditor brought an application before the High Court challenging the appointment of the liquidator at a meeting of the creditors.  The creditor complained that the chairman had refused to allow its proxy to vote in favour of its nominee for liquidator.

The liquidator’s appointment was challenged on the basis that;

  1. the special proxy form provided by the company deviated from the form prescribed by the Rules of the Superior Courts.  It is the responsibility of the company to provide proxy forms in the prescribed format.
  2. the chairman had permitted the proxies of three companies to vote despite the fact that the relevant proxy forms were not properly executed.
  3. the chairman was also found to have wrongly excluded two proxies solely on that basis that the forms had been sent by fax.

The Court found that had the chairman treated the relevant proxies in the proper manner, the result of the voting would have been very different: the applicant’s nominee (and not the company’s nominee) would have been appointed the liquidator of the company.  Accordingly, the Judge made an order substituting the nominee of the applicant in place of the liquidator appointed at the creditors’ meeting.

Do you have any questions?

Feel free to contact Lisa on +353 (0) 1 677 9000 or by email for a complimentary confidential consultation.

Lisa Byrne is an Assistant Manager in the Audit Division and since she joined the firm in 2004 has gained a wealth of experience in all areas of accountancy and audit. Lisa’s all-round business acumen is further enhanced by her specialisation in the areas of auditing and compliance within the financial services sector. She recently managed the audits of a number of wealth management products for two global banks. Lisa's specialist areas include; Statutory Audit, Independent Mediation, Personal Forensic Investigations, and Personal Injury and Fraud Cases.