We are aware that the monitors have regularly criticised IPs for not providing sufficient information in their reports when convening general meetings of creditors in compulsory liquidations and bankruptcies for the appointment of a committee/fixing the basis of remuneration.
The report should set out known assets, i.e. those disclosed to you by the OR or otherwise ascertained, and include a note of the strategy that you will be adopting to realise those assets. You should also include a summary of the known liabilities, identifying separately secured, preferential and unsecured creditors, although it is not necessary to enclose a list of the names and addresses of creditors. In compulsory liquidations you should also be looking to include an explanation about the prescribed part provisions, and then indicate how they will apply, or not as the case may be, to the company in question.
Since the purpose of the meeting is to fix the basis of your remuneration, assuming a committee is not appointed, you also need to provide the standard SIP 9 information – time spent, charge out value to date, receipts and payments account – and an explanation as to what you have done and achieved to justify the time spent to date. Do not forget to send a copy of the correct version of the SIP 9 Guidance Notes with the report, or ideally refer them to a web-site containing them, preferably your own, whilst indicating that you can send them a hard copy if they cannot access a copy. Enclosing a copy of your charge out rates also helps with transparency.
The receipts and payments account, any notes to the account and the report itself must, in combination, also comply with the requirements of SIP 7. In particular, you need to ensure that you provide creditors with details of expenses that have been incurred or accrued, which will include both your expenses and those of any agents or solicitors that you have instructed.
Finally, in compulsory liquidations you also need to comply with SIP 2 if the report is your first contact with the creditors, and invite them to provide information on any concerns they may have about the way in which the company's business has been conducted, and on any potential recoveries for the benefit of the estate.
A corollary to this is that the earlier you call the general meeting to appoint a committee/fix the basis of your fees, the less information you have to report to creditors and the less time costs you will have incurred and hence have to explain. As a result you should consider convening a meeting immediately upon appointment, combining it with your notice of appointment to creditors.
