The Compendium

Section 246ZE Insolvency Act 1986 applies where any person (for example the directors or, sometimes, the Liquidator) seeks a decision from the company’s creditors (or contributories).

This person referred to above can seek a decision to be made by way of:

• Correspondence
• Electronic voting
• Virtual meeting
• … or (by exception) by a physical meeting of creditors if 10% in value of creditors request it, 10% in number … or 10 creditors For the purposes of a Creditors’ Voluntary Liquidation (CVL) appointment only a virtual meeting can be used.

(See ‘Decision Date’.) Deemed consent is a process by which an insolvency officeholder can seek a decision by creditors in insolvency proceedings which does not require them to vote on the proposed decision. It is a mechanism by which decisions are approved.

In this procedure, the officeholder sends a notice specifying that the deemed consent procedure is being followed, and giving directions for how to object to the decision. The issue will be deemed to have been accepted as if it were voted through in the qualifying decision-making procedure, unless the requisite number of creditors/contributories object. The decision will be deemed to have been made will be deemed to have been made if less than 10% of creditors in value object to the proposed decision.

Deemed consent is not a qualifying decision procedure, and therefore, cannot be used in all situations in which a decision is required.

Certain decisions cannot be made using the deemed consent procedure, most notably decisions about an officeholder’s remuneration.

[See ‘Insolvency Act’, ‘Deemed Consent’, ‘Creditors’ Voluntary Liquidation’, ‘Electronic Meeting’, ‘Meeting by Correspondence’, ‘Virtual Meeting’, ‘CVL’, ‘Officeholder’ and ‘Insolvency Act’.]