2.1. Establishment of Creditors Committee etc.

2.1.1 A creditors committee may be established for a Company:

• (a) if an Administrator is appointed for the Company—at the Administrator’s request; or
• (b) by a creditors meeting.

2.1.2 The committee must consist of at least 3 and not more than 5 creditors of the Company.

2.1.3 Any creditor of the Company is eligible to be a member of the committee if the creditor’s claim has not been rejected for the purpose of the creditor’s entitlement to vote. A creditor of the Company who is not an individual may only act through a named representative.

2.1.4 The committee is not established until at least 3 of the Persons who are to be members of the committee have agreed to become members.

2.2. Functions and meetings of creditors committee

2.2.1 The creditors committee of a Company must assist the Administrator to Exercise the Administrator’s Functions, and must act in relation to the Administrator in the way that may be agreed from time to time.

2.2.2 The creditors committee may consent on behalf of creditors to any proposal by the Administrator. If the creditors committee consents to a proposal on behalf of the creditors, the proposal is binding on all creditors.

2.2.3 The creditors committee may withdraw its consent to a proposal. However, any withdrawal takes effect from when it is made, and does not invalidate the original consent.

2.2.4 Meetings of the creditors committee are to be held when and where the Administrator decides.

2.2.5 However, the Administrator must call a first meeting of the committee to take place within 3 months after the day it is established. After the first meeting of the committee, the Administrator must call a meeting:

• (a) if requested by a member of the committee or the representative of a member; and
• (b) for a specified date, if the committee has previously resolved that a meeting be held on that date.

2.2.6 A meeting called because of a request under paragraph (a) must be called for a date not later than 21 days after the day the Administrator receives the request.

2.2.7 The Administrator must give 7 days' notice of the Venue of a meeting to every member of the committee (or the member’s representative, if designated for that purpose), unless in any case the requirement of notice has been waived by or on behalf of any member. Waiver may be indicated either at or before the meeting.

2.3. Proceedings at meetings of creditors committee etc.

2.3.1 The chair of any meeting of the creditors committee must be the Administrator or a Person nominated in Writing by the Administrator.

2.3.2 A meeting of the committee is duly constituted if due notice has been given to all the members, and at least 2 members are present or represented.

2.3.3 A member of the committee may, in relation to the business of the committee, be represented by an individual authorised by the member.

2.3.4 However, a committee member may not be authorised to represent another committee member and an individual may not be authorised to represent 2 or more committee members at the same time.

2.3.5 The chair at any meeting of the committee may call on an individual claiming to represent a member to produce the individual’s letter of authority, and may exclude the individual if it appears that the authority is deficient.

2.3.6 If a member’s representative signs a Document on the member’s behalf, the fact that

the representative signs on the member’s behalf must be stated below the representative’s signature.

2.3.7 A member of the committee may resign by notice given to the Administrator.

2.3.8 A member of the committee automatically ceases to be a member if:

• (a) the member becomes bankrupt; or
• (b) the member is not present or represented at 3 consecutive meetings of the committee (unless at the third of those meetings it is resolved that this paragraph is not to apply to the member in relation to some or all of those meetings); or
• (c) the member ceases to be, or is found never to have been, a creditor.

2.3.9 A member of the committee may be removed by a resolution passed at a meeting of creditors. At least 14 days notice must be given of the resolution.

2.3.10 If a member of the creditors committee ceases to be a member of the committee, the Administrator may appoint any creditor to fill the vacancy, if a majority of the members of the committee agree to the appointment and the creditor consents to act. However, if there are at least 2 members of the Committee after the vacancy, the vacancy need not be filled if the Administrator and the remaining members of the committee agree.

2.3.11 At any meeting of the committee, each member of the committee (whether present personally or by the member’s representative) has 1 vote. A resolution is passed if a majority of the members present or represented vote in favour of it.

2.3.12 Every resolution passed must be recorded in Writing, either separately or as part of the minutes of the meeting. The record must be signed by the chair of the meeting and kept with the records of the relevant Insolvency Proceedings.

2.3.13 The Administrator may seek the agreement of the members of the committee to a resolution by sending a copy of the proposed resolution to every member (or the member’s representative designated for the purpose). The proposed resolution must be set out so that agreement or disagreement with the resolution may be indicated by the recipient on the copy sent to the recipient, separately from any other resolution sent to the recipient at the same time. Any member of the committee may, within 7 business days after the day the member receives the resolution, require the Administrator to call a meeting of the committee to consider the matters raised by the resolution. In the absence of such a request, the resolution is taken to have been passed by the committee if the Administrator is notified in Writing by a majority of the members that they agree with it.

2.4. Expenses of members of creditors committee

The Administrator of a Company must reimburse, out of the assets of the Company in the prescribed order of priority, any reasonable travelling expenses directly incurred by members of the creditors committee or their representatives in relation to their attendance at committee meetings or otherwise on committee business.

2.5. Dealings of creditor committee members with Company

2.5.1 Membership of the creditors committee of a Company does not prevent a Person from dealing with the Company while there is an Administrator of the Company if any transactions between the Company and the Person are entered into in good faith and for value.

2.5.2 The Court may, on the application of any Person interested, set aside a transaction between the Company and a member of the creditors committee if the transaction was not entered into in good faith and for value, and may give the consequential directions that it considers appropriate to compensate the Company for any loss that it may have incurred as a result of the transaction.

2.6. Formal defects in relation to creditors committee

The acts of the creditors committee of a Company are valid despite any defect in the appointment, election or qualifications of any member of the committee or any member’s representative or in the formalities of its establishment.