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CS Professional · Corporate Restructuring, Valuation and Insolvency · Liquidation on or after Failing of Resolution Plan

A liquidator of Yamuna Retail Ltd is entitled to fees. Under section 53, how are the liquidator's fees dealt with in distribution?

The liquidator's fees are deducted proportionately from the proceeds payable to each class of recipients under the section 53 waterfall, and each recipient is then paid after that deduction. No single class, such as equity holders or workmen, bears them alone.

  1. ADeducted proportionately from the proceeds payable to each class of recipients before they are distributedCorrect
  2. BPaid entirely from the share of equity shareholders
  3. CPaid first from workmen's dues only
  4. DPaid only from the proceeds to unsecured creditors

Explanation

Section 53(3) states that the liquidator's fees are deducted proportionately from the proceeds payable to each class of recipients, and the relevant recipient is paid after such deduction. No single class bears the fees alone.

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