CS Professional · Corporate Restructuring, Valuation and Insolvency

Convening and Conduct of Meetings of Committee of Creditors: formula sheet

Full chapter guide

Key formulas

Constitution of CoC: CoC = all financial creditors of the corporate debtor (excluding related parties); Formed by the interim resolution professional after collating claims and determining the financial position. Section 21(1) and (2).
Voting share: Voting share of a creditor = financial debt owed to it ÷ total financial debt of all CoC members × 100; Section 24(6) bases voting on financial debts. The resolution professional fixes the share as specified by the Board. The percentage form is the working method for answers.
Decision rule: Decision passed if votes in favour ≥ 51% of the voting share of financial creditors; Section 21(8). Applies save as otherwise provided in the Code, so some decisions need a different majority.
Related party exclusion: Related party financial creditor: no representation, participation or voting; First proviso to Section 21(2). Limited exception for regulated financial creditors in the second proviso.
Dual creditor: Financial creditor to the extent of financial debt; operational creditor to the extent of operational debt; Section 21(4). Only the financial part counts for CoC membership and voting share.
Operational creditor participation: Notice and one representative if aggregate dues ≥ 10% of the debt; no vote; Section 24(3)(c) and 24(4).
Information to CoC: Financial information to be supplied within 7 days of requisition; Section 21(9) and (10).
Mode of meeting: In person or by electronic means as specified (s 24(1)); The mode is not limited to physical meetings.
Who conducts: All CoC meetings are conducted by the resolution professional (s 24(2)); The RP convenes, conducts and gives notice. The RP does not vote.
Who gets notice: CoC members (with authorised representatives) + suspended directors/partners + operational creditors with aggregate dues ≥ 10% of the debt (s 24(3)); The 10% test applies only to operational creditors.
Who may attend without voting: Directors, partners and one operational creditor representative; no vote (s 24(4)); Absence of any of them does not invalidate the meeting.
Representation: A CoC member may appoint an IP other than the RP to represent it; fees borne by that creditor (s 24(5)); Subject to s 21(6), (6A) and (6B).
Voting: Vote = voting share based on financial debt owed to the creditor (s 24(6)); share determined by the RP as specified by the Board (s 24(7)); Operational creditors do not get a vote through this route.
Manner of conduct: Meetings conducted in such manner as may be specified (s 24(8)); Notice period and quorum are in the Board's regulations, not in section 24.
Who conducts and chairs: Meeting conducted by the RP; RP = chairperson; The RP conducts under section 24 of the Code and chairs under the CIRP Regulations.
Notice recipients: CoC members + authorised representatives + suspended directors/partners + operational creditors with aggregate dues ≥ 10% of the debt; Directors, partners and one operational creditor representative may attend but cannot vote. Their absence does not invalidate proceedings.
Notice period: Not less than 5 days' notice; The Regulations require at least five days' notice. Verify the current Regulation before citing any exception for shorter notice.
Contents of notice: Venue, time, date + video option + matters to discuss + issues to vote + relevant documents + e-voting details; E-voting details cover the process, the time period for votes, login ID and password facility, and a contact person.
Quorum: Members holding ≥ 33% of voting rights present (in person or by video); The CoC may modify the percentage for future meetings.
No quorum: Meeting stands adjourned to the same time and place on the next day; This applies unless the CoC has previously decided otherwise. The adjourned meeting is quorate with whoever attends.
Minutes: Circulate electronically within 48 hours of the meeting; Minutes must show who attended in person and who attended through video or other audio and visual means.
Place of video meeting: Scheduled venue in notice (in India) = deemed place of meeting; All recordings are deemed made at that place.
Voting share: Voting share of a creditor = (Financial debt owed to that creditor ÷ Total financial debt owed to the creditors who vote) × 100; Section 24(6) and (7): voting follows financial debt, and the RP determines the share as the Board specifies. A creditor with no vote, such as a related party, is not a voting creditor. The exact computation follows the Board's regulations.
General CoC decisions: Vote of not less than 51% of the voting share of the financial creditors; Section 21(8). It applies save as otherwise provided in the Code. The test is on voting share, not on the number of creditors or those present.
Resolution plan approval: Not less than 66% of the voting share; A higher threshold than 51%. The CoC approves the plan, and the Adjudicating Authority then approves it.
Withdrawal under section 12A: Approval by 90% of the voting share; Higher threshold. Section 25A(3A) proviso: for a section 12A vote, the authorised representative votes on individual instructions, not on the block majority.
Authorised representative: general rule: Vote each creditor's share as per its prior instructions; abstain for a creditor who gave none; Section 25A(1) and (3), including both provisos. The AR must not act against the creditor's interest.
Authorised representative: class under section 21(6A): Cast the whole block as decided by more than 50% of the voting share of those creditors who cast their vote; Section 25A(3A). The majority is counted among those who voted, not among all creditors in the class. Exception: section 12A applications.
Convener of the meeting: Convener = bankruptcy trustee (s. 134(1)); The trustee convenes the meeting summoned under Section 133.
Quorum: Quorum decided by the bankruptcy trustee; meeting conducted only if quorum is present (s. 134(2)); The Code gives no fixed number. Do not invent one.
Business of the meeting: (a) establish a committee of creditors; (b) any other business the trustee thinks fit (s. 134(3)); A resolution may be passed on this business.
Minutes: Recorded, signed and retained as part of the records of the bankruptcy process (s. 134(4)); The duty is on the trustee.
Adjournment limit: Not more than 7 days at a time (s. 134(5)); The trustee cannot adjourn beyond this at one go.
Summoning the meeting: Notice within 21 days of bankruptcy commencement date; meeting date not later than 21 days from that date (s. 133); Notice goes to every creditor in the Section 132 list, with proxy forms.
Voting entitlement: Vote per voting share; no vote for unliquidated debt; no vote for unlisted/unnoticed creditors or associates of the bankrupt (s. 135); The resolution professional determines the voting share as specified by the Board.
Final meeting (s.137(1)): Administration and distribution complete → trustee convenes CoC meeting; The duty is on the bankruptcy trustee. Administration must be done in accordance with Chapter V.
Report (s.137(2)): Trustee gives CoC a report of the administration of the estate in that meeting; The report is given at the meeting, not merely filed.
Approval time (s.137(3)): CoC approves report within 7 days of receipt; The same sub-section says the CoC also determines whether the trustee should be released under section 148.
Meeting expenses (s.137(4)): Trustee retains sufficient sums from the estate for the meeting expenses; Retention is made during the administration of the estate.
Release on completion (s.148(3)): Release of trustee takes effect from the date the CoC approves the s.137 report; Section 148(1) is different: release on replacement, resignation or vacancy takes effect from the date of the Adjudicating Authority's order appointing a new trustee.
Discharge application (s.138(1)): Apply (a) on expiry of 1 year from bankruptcy commencement date; or (b) within 7 days of CoC approval under s.137, if approval comes before that period ends; The Adjudicating Authority passes the discharge order on the trustee's application, and a copy goes to the Board for the register under section 196.

Quick revision

Section 24: CoC members may meet in person or by specified electronic means.
The resolution professional conducts all CoC meetings.
Notice goes to CoC members, suspended directors or partners, and operational creditors with aggregate dues of at least ten per cent of the debt.
Directors, partners and one operational creditor representative may attend but cannot vote; their absence does not invalidate the meeting.
Voting is by voting share based on financial debts owed, determined by the resolution professional as the Board specifies.
Regulation 22: quorum is at least thirty three percent of voting rights, unless the committee modifies it for future meetings.
No quorum: the meeting stands adjourned to the same time and place next day, and the adjourned meeting is quorate with those attending.
Section 25A: the authorised representative votes on prior instructions and abstains if none are given.
Section 134: the bankruptcy trustee convenes the meeting, decides quorum, and cannot adjourn for more than seven days at a time.
Section 135: no vote for unliquidated debts, or for creditors who are associates of the bankrupt.
Section 137: the CoC approves the trustee's report within seven days of receipt; section 148 releases the trustee on approval.
Section 54-I: the CoC in a pre-packaged process is constituted within seven days and meets first within seven days of constitution.

Common mistakes

Including operational creditors as CoC members because their dues are large. Fix: Membership depends on being a financial creditor. Operational creditors with dues of at least 10% of the debt get notice and one representative may attend, with no vote.
Letting a related-party financial creditor vote. Fix: Always test related-party status. Such a creditor has no right of representation, participation or voting, subject to the narrow proviso.
Saying suspended directors can vote because they get notice. Fix: Directors and partners may attend but have no right to vote under section 24(4).
Applying the 10% test to all creditors or to directors. Fix: The 10% aggregate dues test applies only to operational creditors under section 24(3)(c).
Counting the number of members present instead of their voting share for quorum. Fix: Quorum is voting rights. Add the percentage shares of those present and compare with 33%.
Saying a meeting is invalid because the suspended directors or an operational creditor representative did not attend. Fix: Their absence does not invalidate the proceedings, and they have no vote anyway.
Treating every CoC decision as needing 66%. Fix: Remember the ladder: 51% for ordinary decisions under section 21(8), 66% for plan approval, 90% for section 12A withdrawal. Name the decision before you name the number.
Counting one vote per creditor. Fix: State that voting is by voting share based on financial debt owed (section 24(6)). Always compute percentages, never head counts.
Treating the Section 134 meeting as a CoC meeting under Section 24. Fix: Section 24 is for corporate insolvency and is conducted by the resolution professional. Section 134 is for bankruptcy and is conducted by the bankruptcy trustee.
Stating a fixed quorum number or a percentage. Fix: Write that the bankruptcy trustee decides the quorum and conducts the meeting only if it is present.

Exam tips

Open every answer with the section: Section 21 for constitution and the 51% rule, Section 24 for meetings and voting share.
Always show the voting share calculation with total financial debt, even if the question seems to ask only a theory point.
Use the facts: name the creditors, mark each as financial, operational or related party, then conclude.
Remember the 10% operational creditor threshold and the no-vote rule. These are frequent short-note points.
Say 'save as otherwise provided in the Code' when stating the 51% rule, so you do not overstate it.
Draft in three parts: provision, application to the facts, conclusion. Cite section 24 sub-sections as in the text.
Always separate three rights: notice, attendance and voting. Many case questions test only this split.
Do not give a notice period or quorum as part of section 24. Refer to the Board's specified manner and note that section 24(8) delegates it.