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CS Professional · Corporate Restructuring, Valuation and Insolvency · Insolvency

Arjun's name has been approved as the proposed resolution professional by the corporate debtor's creditors under the relevant provision of the pre-packaged insolvency resolution process framework (section 54A(2)(e)), but the pre-pack process has not yet been initiated. Which statement is correct about his role?

Once the proposed resolution professional's name is approved under section 54A(2)(e), Section 208(1A) makes it his function to take such actions as may be necessary to perform his functions and duties before the pre-packaged process begins. He need not wait for initiation.

  1. AHe has no function until the Adjudicating Authority admits the pre-pack application
  2. BIt is his function to take such actions as may be necessary to perform his functions and duties prior to initiation of the pre-pack processCorrect
  3. CHis function before initiation is limited to liquidation of the corporate debtor
  4. DHe must act only as an interim professional under CIRP rules before initiation

Explanation

Section 208(1A) provides that where the proposed resolution professional's name is approved under section 54A(2)(e), it is his function to take necessary actions to perform his functions and duties before the pre-pack process is initiated. Option A is wrong because the function starts before initiation, not only after admission.

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