The creditors' meeting to approve the proposal must be held at a venue convenient for the creditors, between 10 am and 4 pm on a business day and it must be chaired by the nominee or his nominated substitute (who must be suitably experienced).

There is no need to lodge proxy forms prior to the meeting - they may be taken by the proxy holder to the meeting. Provided that written notice of their claim has been submitted to the chairman either before or at the meeting creditors are entitled to vote thereat. Votes are by value of the creditor's debt (secured creditors votes are calculated only on the unsecured part of their debts). The meeting cannot affect the rights of secured or preferential creditors without their consent.

A resolution to approve or modify the proposal requires a majority in excess of three quarters in value of the creditors present (in person or by proxy) and voting. Other resolutions may be passed by a simple majority.

To avoid decisions being distorted by any persons associated with the debtor (family or business associates) a resolution will be invalid if those who vote against it include more than half in value of those creditors who have no connection with the debtor.

The meeting may be adjourned as many times as necessary in the period up to 14 days after the original meeting, until the proposal is either accepted or rejected, but no longer. The meeting may approve the proposal or may approve it with modifications (but please note that these must be agreed by the debtor). Once approved by the creditors at the meeting, the arrangement is binding on every person who had notice of and was entitled to vote at the meeting, whether or not they actually did so. The chairman must prepare a report on the meeting and file a copy of it with the court. He must also inform all those who were sent notice of the meeting of the result of the meeting. If the proposal is approved, the chairman must also lodge details of the arrangement with the Secretary of State for inclusion in a register.

Challenge of decisions

Within 28 days of the date on which the report of the creditors' meeting was made to the court an application challenging that decision may be made to the court. The challenge may be made on the grounds that the arrangement approved by the creditors' meeting unfairly prejudices the interest of a creditor of the debtor or that there has been some material irregularity at or in relation to such a meeting. If the court upholds the challenge it may give a direction to any person that a further meeting should be summoned to consider any revised proposal that the debtor may make or to reconsider his original proposal.