Skip to content

CS Professional · Corporate Restructuring, Valuation and Insolvency · Resolution Strategies

At the first meeting of the committee of creditors of Ganga Polymers Ltd, financial creditors holding 70% of the voting share vote to replace the interim resolution professional with another professional. What follows under Section 22?

Since 70% exceeds the required sixty-six per cent, the resolution is valid. The committee must apply to the Adjudicating Authority with the proposed professional's written consent, and the appointment is made after the Board confirms the name. It is not automatic, and 75% is no longer required.

  1. AThe committee files an application before the Adjudicating Authority with the proposed professional's written consent, and the appointment is made after confirmation by the BoardCorrect
  2. BThe replacement takes effect at once without any further step
  3. CThe replacement fails because 75% is required
  4. DThe Board appoints the replacement directly without the Adjudicating Authority

Explanation

Section 22(2) needs not less than sixty-six per cent of the voting share, so 70% suffices. Under 22(3)(b) the committee applies to the Adjudicating Authority with the proposed professional's written consent, and under 22(4) the appointment follows the Board's confirmation. The 75% figure is the old threshold, since substituted.

Did you get it right without looking?

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

Practise Resolution StrategiesFree diagnostic mock

More Resolution Strategies questions