MENU

Section 314 of Insolvency Act CAP 53: Right to challenge decision taken at creditors’ meeting

    

(1) Subject to subsection (3), any of the persons specified in subsection (2) may make an application to the Court on either or both of the following grounds—
(a) that a debtor's proposal approved by a creditors' meeting held in accordance with section 309 unfairly affects the interests of a creditor of the debtor;
(b) that a material irregularity occurred at or in relation to the meeting.
(2) The persons who may make an application for the purposes of subsection (1) are— (a) the debtor;
(b) a person who—
(i) was entitled to vote at the creditors' meeting; or
(ii) would have been so entitled if the person had had notice of it;
(c) the provisional supervisor or, if the proposal has taken effect as a voluntary arrangement, the supervisor of the arrangement; and
(d) if the debtor is an undischarged bankrupt, the bankruptcy trustee in respect of the debtor's estate or the Official Receiver.
(3) An application under this section may not be made—
(a) after the end of thirty days from and including the date on which the result of the creditors' meeting was reported to the Court in accordance with section 309(10); or
(b) in the case of a person who was not given notice of the creditors' meeting, after the end of thirty days from and including the date on which the person first became aware that the meeting had taken place,
but, subject to that, an application made by a person referred to in subsection (2)(b)(ii) on the ground that the voluntary arrangement unfairly affects the person's interests may be made even after that arrangement has ended, unless it has ended prematurely.
(4) If, on the hearing of an application made under subsection (1), the Court is satisfied as to either of the grounds referred to in that subsection, it may do one or both of the following—
(a) make an order revoking or suspending an approval given by the meeting;
(b) give a direction to any person for the convening of a further meeting of the debtor's creditors to consider any revised proposal the person may make or, in a case to which subsection (1)(b) applies, to reconsider the debtor's original proposal.
(5) If, at any time after giving a direction under subsection (4)(b) for convening a meeting to consider a revised proposal, the Court is satisfied that the debtor does not intend to submit such a proposal, the Court shall revoke the direction and revoke or suspend any approval given at the previous meeting.
(6) If the Court gives a direction under subsection (4)(b), it may also give a direction continuing or, as the case requires, renewing, for such period as may be specified in the direction, the effect in relation to the debtor of any applicable interim order.
(7) If, on the hearing of an application made under subsection (1) with respect to a creditors' meeting, the Court gives a direction under subsection (4)(b) or revokes or suspends an approval under subsection (4)(a) or (5), it may give such ancillary directions as it considers appropriate and, in particular, directions with respect to—
(a) action taken since the meeting under any voluntary arrangement approved by the meeting; and
(b) such action taken since the meeting as could not have been taken if an interim order had had effect in relation to the debtor when it was taken.
(8) Except as otherwise provided by this section, an approval given at a creditors' meeting held in accordance with section 309 is not invalidated by any irregularity occurring at or in relation to the meeting.

« Previous:   Section 313 - Additional effect on undischarged bankrupt          Next: »   Section 315 - Implementation and supervision of voluntary arrangement

Disclaimer: This document is not to be taken as legal advise.

Enhance Your Research with Bookmarks and Annotations

Here's how you can use these features:

  • To bookmark this page, click the "Bookmark this Page" button below the document title.
  • To add an annotation, highlight text in the document and select "Add Annotation" from the toolbar that appears.
  • These features are great for organizing your research and keeping track of key information.
  • You can view and manage your bookmarks and annotations on your Bookmarks and Annotations page.

Cited By:

More Sections