RESTRICTION ON VOTING RIGHTS FOR RELATED PARTIES AT CREDITORS MEETINGS

From 7th December 2018, the Insolvency Law Rules have been amended so that related parties are no longer to vote at a meeting of creditors for the replacement of a liquidator in circumstances where that related party has taken an assignment of debt for an amount in excess of the consideration paid for the assignment.

The purpose of this change is to prevent Phoenix activities such that parties related to the directors of the company in liquidation are not able to “stack” the meeting to outvote the legitimate interests of the ordinary independent unsecured creditors.