The Scottish liquidation and administration Rules (R7.19 ISRWUR 2018 and R3.108 ISCVAAR 2018) both state that the office holder must send every known creditor a list of claims that have been accepted or rejected:
(2) On accepting or rejecting, under paragraph (1), every claim submitted or deemed to have been re-submitted, the liquidator/administrator must, as soon as reasonably practicable, send a list of every claim so accepted or rejected (including the amount of each claim and whether it has been accepted or rejected) to every creditor known to the liquidator/administrator.
This appears to mean that every creditor (regardless of whether they are receiving a distribution) should receive the list of claims admitted/ rejected.
Historically we have only been sending the letter and schedule to the class of creditor receiving the distribution. This does sound more practical, particularly in a case where we are only paying the preferential creditors. We are circulating the names and amounts of their claims to potentially hundreds of people as it cannot only be uploaded to our website per R1.45.
Do you think the details should be going to all creditors?
We have looked at the Act and Rules and consulted the bankruptcy authorities and guidance for any commentary on this matter, since there are no current corporate authorities. We could not find anything.
However, we agree with your interpretation. The wording states “every known creditor” in both Rules.
The principle that sits behind that is the protection of the wider body of creditors. If the office holder allows a claim significantly higher than originally anticipated, then the other creditors have a right to appeal that decision and adjudication since it will have a potential impact on the level of dividend they may receive. If that claim is preferential and ranks higher than the ordinary claims, they will again be impacted if that claim is allowed, so all classes of creditor have a right to appeal any claim adjudication, and not just the class of creditor that is getting paid. Therefore, it makes sense that to allow the creditors (and members) to exercise their rights of appeal, all creditors should be given notice of any adjudication.
You raise a point about the use of websites as well – and here is an interesting thing.
In R1.45 ISRWUR 2018 para 2(b) states that you cannot give notice by website of any document relating to adjudication of claims or payment of a dividend. In a liquidation, you will need to post to creditors (including opted outs) notice of the adjudication.
In the equivalent R1.45 ISCVAAR 2018, there is no equivalent to para 2(b) which suggests that you can give notice of your adjudication of claims in an administration solely by way of a website.
