Section 100 meeting of creditors — what to expect

Section 100 IA 1986 was amended by the Small Business, Enterprise and Employment Act 2015 (effective April 2017). The amendment ended the default physical meeting in favour of a "decision procedure" approach. Creditors can choose:

• ›Deemed consent procedure (default) — creditors who don't object are deemed to consent.
• ›Virtual meeting — online meeting where creditors vote in real time.
• ›Physical meeting — rare; only on creditor request and where the IP convenes it.

SIP 6 (Statement of Insolvency Practice 6) governs how the IP must conduct the procedure. SIP 6 requires fair process — including the right of creditors to request a virtual or physical meeting where deemed consent is proposed.

Used in approximately 70–80% of SME CVLs. Process:

• ›The directors propose the liquidator (in practice, the IP advising the directors) and convene the decision procedure.
• ›Notice is sent to all known creditors, with at least 14 days' notice (shorter possible with creditor consent).
• ›The notice includes the Statement of Affairs and a deemed consent date.
• ›If 10% or more (by value) of creditors object before the deemed consent date, the procedure converts to a virtual or physical meeting.
• ›If no objections are received, the proposed liquidator is appointed on the deemed consent date.

For most SME CVLs, no creditor objects — the deemed consent procedure is efficient and avoids the cost of a virtual meeting.

Used when deemed consent is objected to, or where the IP recommends a virtual meeting (typically where the case is complex or controversial). Process:

• ›Notice convenes the virtual meeting — typically by video conference or telephone conference call.
• ›Same 14-day notice period applies.
• ›Creditors join the meeting at the appointed time.
• ›The chair (typically the proposed liquidator's representative) presents the position and answers questions.
• ›Creditors vote on the liquidator's appointment and any creditors' committee.
• ›Voting is by value of creditor claims — the largest creditors have the most influence.

Virtual meetings typically last 30–60 minutes. The chair manages procedure; creditor questions are answered. Most meetings pass without contention — the proposed liquidator is appointed.

Directors are not parties to the section 100 procedure — creditors are. But directors must facilitate:

• ›Statement of Affairs preparation — the SoA accompanies the notice to creditors.
• ›Director information to the proposed liquidator — books and records, accounting information, creditor schedules.
• ›Attendance at virtual meeting (if applicable) — directors may be asked to answer creditor questions.
• ›Cooperation with the section 218 investigation that follows appointment.

Directors typically have a quiet experience at the section 100 procedure itself. The intensity is in preparation (Statement of Affairs, books and records) and afterward (cooperation with the liquidator).

Where creditors ask questions, common themes:

• ›What happened? — the directors' or proposed liquidator's brief summary of how the company became insolvent.
• ›What's the expected outcome? — what creditors should expect by way of distribution.
• ›Were there any wrongful trading concerns? — the proposed liquidator's initial view.
• ›What about director loan accounts? — asset on the SoA?
• ›What about the bank / secured creditor? — their position relative to other creditors.

Creditors may appoint a committee to oversee the liquidator's work. Typically 3–5 unsecured creditors. The committee receives more detailed reports and approves significant decisions (e.g., agreements to settle litigation, large fee applications).

Most SME CVLs don't have a committee — the cost of running one exceeds the benefit. But where substantial unsecured creditors are present, a committee can be valuable.

SIP 9 requires fee disclosure upfront. The proposed liquidator's fee basis (fixed fee for simple CVL, or time costs for complex cases) is disclosed in the notice. Where time costs apply, creditors approve the fee at the decision procedure — either by deemed consent or vote. The hourly rates are disclosed in the SIP 9 disclosure. See the CVL cost spoke for the fee framework and the resources page for current hourly rates.