Invitation from the Liquidator: Should We Go?

Should we participate, does it make sense, to travel hundreds of kilometers?

Within 75 days of the commencement order of liquidation proceedings, the liquidator has to invite the registered creditors to a meeting with a purpose of formation of a creditors’ committee.

When a creditor receives such an invitation, it is a common question, whether he should participate, whether it makes sense to travel sometimes hundreds of kilometres to do so and what the whole matter is about.

The committee itself is a ‘body’ of 3-7 persons elected by at least a third of all creditors (who together hold at least a third of the claims) to act as a link between the liquidator and the creditors and, also in some cases between the creditors and the court.

At the meeting convened by the liquidator it must therefore be first assess whether at least one third of the creditors wish to form a committee and if so, who should be appointed/elected to it. A chairman may be elected by the creditors who have formed the committee from among the members of the committee.

The operation of the committee is determined by the creditors who run it, decisions shall be done for the budget, the financing of its operation, the right of representation, etc. It is important to note that a committee can be formed at a later date and that creditors are free to join and leave, but the above mentioned quota must be guaranteed at all times.