CS Professional · Corporate Restructuring, Valuation and Insolvency · Role, Functions and Duties of IP, IRP and RP
Bankruptcy trustee Ms. Nair resigns because of a conflict of interest, and the Adjudicating Authority accepts the resignation. Which statement about the replacement and her release is correct?
The Board recommends a replacement within ten days of the Adjudicating Authority's direction, and Ms. Nair is released only from the date the Authority passes the order appointing the new trustee. Even after release she must share information and cooperate with the successor.
- AShe is released on acceptance of resignation, and need not share information afterwards
- BThe Board recommends a replacement within ten days of the Adjudicating Authority's direction, and she is released when the new trustee is appointed by orderCorrect
- CThe Adjudicating Authority recommends the replacement within seven days, and she is released at once
- DThe committee of creditors appoints the replacement, and she is released on filing her final report
Explanation
Under section 146 the Authority directs the Board for replacement within seven days of accepting the resignation, and the Board recommends another trustee within ten days. Under section 148(1) she is released from the date of the order appointing the new trustee, and under 148(2) she must still share information and cooperate. So release is not immediate.
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