Zooming Ahead: Insolvency Practice Rules Amended to Enhance Framework for Virtual Meetings

Allie Umoff

There has been a wave of provisions being implemented across various sectors to modernise and increase flexibility in formal processes and procedures, undoubtedly largely as a result of the exigencies of the COVID-19 pandemic. In what could be seen as the pandemic’s silver lining, practices which began as a matter of practical necessity during lockdowns and periods of isolation are now being embraced and enhanced in legislation as a ‘new normal’.

One such area of enhancement is in respect of the conduct of meetings in external administrations, conducted in accordance with the Insolvency Practice Rules (Corporations) 2016 (IPR). While a virtual meetings framework was first introduced into the IPR in 2020 in response to the pandemic, the recent amendments contained within the Insolvency Practice Rules (Corporations) Amendment (Virtual Meetings and Electronic Communication) Rules 2022, are designed to enhance the virtual meetings framework and ensure it operates as intended.

The key provisions of the enhancements to the Insolvency Practice Rules virtual meetings framework are summarised below.

Voting at meetings

Voting at virtual meetings is now allowed to be conducted by show of hands (new section 75-75(3)). A new definition of ‘show of hands’ has been inserted, which is defined expansively to include ‘a vote taken using any electronic mechanism that indicates the intentions of a person in respect of the vote’ (s 5-5).

Persons entitled to vote at a meeting must now in all cases be given the opportunity to participate in the vote in real time, and may be given the opportunity to record a vote in advance of the meeting (at the election of the voter) (s 75-75(4)). These changes allow the convenor of the meeting to restrict voting on some matters to real-time votes, and allow voting on other matters to be done ahead of time.

In respect of Part 2 committee meetings, amendments to section 50-6(4) do away with a previous allowance for committee members participating in a virtual meeting to record their vote ahead of time. Instead, under the new rule, each member must participate in the vote in real time. The purpose behind this change, according to the Explanatory Statement, is to prevent a Part 2 committee member from deciding on an application or disciplinary matter without first hearing the application or evidence at the meeting.

Meeting access information

Previously, in the notice of meeting lodged with ASIC, the convenor was required to include sufficient information to allow persons entitled to attend the meeting to participate in the meeting by means of virtual technology. This has now been amended, in section 75-40(2)(db), so that the notice lodged with ASIC is only required to include a statement ‘that sufficient information has been given to persons who are entitled to attend the meeting to participate in the meeting by means of the technology’. In this way, the meeting access information is protected from circulation to people who are not entitled to attend.

Tabling of documents

Documents required or permitted to be tabled at a meeting are considered to have been so tabled if they are made ‘reasonably accessible to persons attending the meeting’, including by giving a copy of the document before the meeting to those entitled to attend the meeting, giving a copy of the document during the meeting to the meeting attendees, or by screen‑casting the document ‘in a reasonable way’ during the meeting to the meeting attendees (s 75-75(7)).

Parallel amendments have been made to the provision related to tabling of documents at meetings of Part 2 committees (s 50-6(7)).

Conclusion

These amendments to the IPR really are enhancements to the virtual meetings regime, as they will improve efficiency in the conduct of meetings in external administrations, provide the external administrator with more flexibility in the meeting process and improve the security of virtual meetings.

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