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CS Professional · Corporate Restructuring, Valuation and Insolvency · Documentation - Merger and Amalgamation

After a fast-track merger of Meru Plastics Ltd (transferor) into Himgiri Polymers Ltd (transferee) is registered, Meru's Registrar-recorded charge over its factory and a pending civil suit against Meru are noticed. What is the effect under section 233?

On registration of a fast-track scheme, the transferor's charges become enforceable as if they were on the transferee's property, and pending legal proceedings continue by or against the transferee company. Dissolution of the transferor without winding-up does not cause the charge to lapse or the suit to abate.

  1. AThe charge is enforceable as if on the transferee's property, and the pending suit continues by or against the transferee companyCorrect
  2. BThe charge lapses and the suit abates since Meru stands dissolved
  3. CThe charge continues but the suit must be withdrawn and refiled against the transferee
  4. DThe suit continues but the charge must be re-registered as a fresh charge before it is enforceable

Explanation

Section 233(9) provides that charges on the transferor's property apply and are enforceable as if on the transferee's property, and pending legal proceedings continue by or against the transferee. Dissolution without winding-up does not cause abatement. The other options add requirements not in the text.

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