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CS Professional · Insolvency and Bankruptcy - Law and Practice · Group Insolvency

A promoter's group has four companies, each admitted into CIRP by the NCLT on separate dates. A single IRP is proposed for all four on the ground that creditors are common. Which statement best reflects the legal position on the role of the insolvency professional?

The same insolvency professional may handle several group companies only where the Adjudicating Authority appoints or permits it. Each company remains a distinct corporate debtor with its own CoC and records, so there is no automatic appointment and no bar on multiple appointments.

  1. AThe same IP may be appointed across group companies only if the Adjudicating Authority allows it, and each company still requires its own CoC and process recordsCorrect
  2. BOne IP automatically becomes IRP of every group company once one is admitted
  3. CAn IP can never be appointed to more than one corporate debtor at any time
  4. DThe holding company's board chooses the IP for all subsidiaries

Explanation

Appointment of an IRP is by the Adjudicating Authority on each admission. Using the same IP is possible where the tribunal considers it suitable, but entities remain separate, so each has its own CoC, information memorandum and records. 'Automatic' appointment has no statutory basis.

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