(1)This section applies where it has been reported to the court under section 256 or to the debtor's creditors under section 256A that the debtor's creditors should consider the debtor's proposal.
(2)The nominee (or the nominee's replacement under section 256(3) or 256A(4)) must seek a decision from the debtor's creditors as to whether they approve the proposed voluntary arrangement (unless, in the case of a report to which section 256 applies, the court otherwise directs).
(2A)The decision is to be made by a creditors' decision procedure.
(2B)Notice of the creditors' decision procedure must be given to every creditor of the debtor of whose claim and address the nominee (or the nominee's replacement) is aware.
(3)For this purpose the creditors of a debtor who is an undischarged bankrupt include—
(a)every person who is a creditor of the bankrupt in respect of a bankruptcy debt, and
(b)every person who would be such a creditor if the bankruptcy had commenced on the date on which notice of the creditors' decision procedure is given.
Cases considering section 257 16
[2016] EWCA Civ 88 · 16 February 2016Defines
The broader section 262 regime applies only where the material irregularity occurred at or in connection with a creditors' meeting summoned under section 257. The court preserved the distinction for defects occurring before or outside the lawful summoning of such a meeting. (see paras [50]-[53])
[2014] EWCA Civ 26 · 21 January 2014Interprets
The court held that the reference in section 262(4)(b) to a further meeting, where the nominee is directed to summon it, means a further meeting under section 257. This construction enabled the statutory consequences of section 260 to operate coherently. (see paras [7], [36], [42]-[44])
The court used the provision as part of the statutory framework for summoning the original meeting and construed the statutory reference to a further meeting by reference to that framework. (see paras [7], [42]-[44])
The court noted that the original meeting must be notified to every creditor of whose claim and address the person summoning the meeting is aware. That provision supported the conclusion that creditors arising between meetings may participate in a further meeting. (see paras [7], [9], [25])
[2010] EWCA Civ 1344 · 24 November 2010Interprets
The provision is described as requiring the nominee to summon the creditors’ meeting. It forms part of the statutory background to determining who may participate. (see para [7])
The provision identifies the persons to be summoned to the creditors’ meeting. The court considers it with section 257(3) in analysing the statutory meaning of creditor. (see paras [7]; [36]; [56])
The court considers the partial definition of creditors of an undischarged bankrupt, but holds that it does not alone determine the class of IVA creditors. (see paras [13]; [36]; [56]-[57])
The provision supports the conclusion that a person owed a bankruptcy debt is a creditor for bankruptcy purposes. It does not resolve whether that creditor can participate in an IVA. (see paras [13]; [37]; [51]-[52])
The court records the extended bankruptcy definition covering persons who would have been creditors if bankruptcy had commenced when notice was given. (see para [13])
What each judgment says about section 257 is in the case-law panel in the full Act.