Rule 42 Business at first meetings of creditors and contributories

(1)

At the first meeting of creditors the FSCS shall state whether or not it is resigning from the liquidation committee.

(2)

At that meeting those creditors present (or represented by proxy) may—

(a)

where the FSCS has not resigned, elect two or four individuals as new members of the liquidation committee;

(b)

where the FSCS has resigned, elect three or five individuals as new members of the liquidation committee;

in place of the members nominated by the Bank of England and the appropriate regulator.

(3)

In accordance with section 100(6)(e) of the Banking Act, the liquidation committee ceases to exist at the end of the meeting if no individuals are elected as mentioned or if the resulting committee would have fewer than three members or an even number of members. The maximum number of committee members shall be five.

(4)

At the first meeting of creditors, no resolutions shall be taken other than the following—

(a)

if an application has been made to the court by the creditors under rule 95 for the court to direct the building society liquidator to summon a meeting of creditors for the purpose of removing the building society liquidator, and the court has directed that a resolution may be passed to that effect at the first meeting of creditors—

(i)

a resolution to remove the building society liquidator (or a resolution to remove one or more of the building society liquidators if joint liquidators were originally appointed), and

(ii)

a resolution to appoint a named insolvency practitioner to be building society liquidator or two or more insolvency practitioners as joint liquidators;

(b)

if no individuals have been elected to form a liquidation committee under paragraph (2), a resolution specifying the terms on which the liquidator is to be remunerated, or to defer consideration of that matter;

(c)

where two or more persons are appointed jointly to act as building society liquidator, a resolution specifying which acts are to be done by both of them, all of them or by only one;

(d)

a resolution to adjourn the meeting for no more than three weeks; and

(e)

any other resolutions which the chair thinks it right to allow for special reasons.

(5)

At the first meeting of contributories, no resolutions shall be taken other than the following—

(a)

if no individuals have been elected to form a liquidation committee under paragraph (2), a resolution to form a liquidation committee (and rule 118 shall then apply);

(b)

a resolution to adjourn the meeting for no more than three weeks; and

(c)

any other resolutions which the chair thinks it right to allow for special reasons.

(6)

The FSCS shall be entitled to be a member of any liquidation committee formed where the liquidation committee has ceased to exist at the end of the first meeting of the creditors.