Skip to content

CS Professional · Corporate Restructuring, Valuation and Insolvency · Insolvency

An application for bankruptcy is filed before the Adjudicating Authority naming insolvency professional Anita as the proposed bankruptcy trustee. The application is received on 3 March. Which sequence is correct under the Code?

The Adjudicating Authority must direct the Board within seven days of receiving the application to confirm no disciplinary proceedings are pending against the proposed trustee. The Board then has ten days from receiving that direction to confirm the appointment or reject it and nominate another trustee.

  1. AThe Authority directs the Board within 7 days of receiving the application to confirm no disciplinary proceedings are pending against her, and the Board responds within 10 days of that directionCorrect
  2. BThe Authority directs the Board within 10 days, and the Board responds within 7 days
  3. CThe Authority directs the Board within 7 days, and the Board responds within 7 days
  4. DThe Board acts on its own motion within 10 days of the application, without any direction

Explanation

Section 125(1) requires the Adjudicating Authority to direct the Board within seven days of receiving the application to confirm there are no pending disciplinary proceedings. Under section 125(2) the Board must, within ten days of receipt of the direction, confirm the appointment or reject it and nominate another trustee. The swapped timelines are therefore wrong.

Did you get it right without looking?

One question tells you little. A timed set on Insolvency shows your real accuracy, how long you take and where you lose marks.

Practise InsolvencyFree diagnostic mock

More Insolvency questions