We are noticing an increasing number of instances in bankruptcies and compulsory liquidations where voting agents are voting in favour of the remuneration resolution, but then capping the quantum of fees that can be drawn. Often there will be different caps from different voting agents. This raises a number of issues for IPs dealing with proxies in such cases.
We have heard the argument that chairman’s special proxies voting in favour of the original remuneration resolution could be used to outvote the caps. We do not think that this works, even if the proxy gives you discretion as chairman to vote as you see fit in respect of other resolutions proposed. You would clearly be exercising that discretion for your own benefit in respect of a resolution that has changed from the one disclosed to the creditor who gave you the discretion. If you wanted to vote out the cap then the safest approach to take is to adjourn the meeting and obtain specific voting instructions from those creditors.
Life is potentially more complicated if you are faced with two conflicting fee caps. However, I do not think that you would ever be criticised for applying the fee cap that is least beneficial to you. It would be similar to the treatment we already see adopted in IVAs where the higher cap is simply ignored. It is not rejected, but does not apply because the lower cap is enforced.
