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CS Professional · Insolvency and Bankruptcy - Law and Practice · Pre-Packaged Insolvency Resolution Process (Elective 7.5)

Arjun Pvt Ltd's director declaration under section 54A(2)(f) was signed on 1 March. The insolvency professional's duties under section 54B began on approval of the proposal by financial creditors. Arjun fails to file the PPIRP application within the period stated in the declaration. What is the effect on the insolvency professional's pre-initiation duties, and on his fees?

The insolvency professional's duties cease because the corporate debtor failed to file within the declared period. His fees count as PPIRP costs only if the application for initiation is admitted, so non-filing does not make them automatically part of those costs.

  1. ADuties continue until the Board directs otherwise, and fees form part of PPIRP costs
  2. BDuties cease, and fees under section 54B(3) form part of PPIRP costs only if the application is admittedCorrect
  3. CDuties cease, and fees are automatically PPIRP costs
  4. DDuties continue for 90 more days, and fees are borne by the creditors

Explanation

Section 54B(2)(a) says the duties cease if the corporate debtor fails to file within the time stated in the declaration. Section 54B(3) makes the fees part of PPIRP costs only if the application is admitted, so here they are not automatically so treated. The other options add continuation or automatic costs that the text does not give.

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