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CS Professional · Corporate Restructuring, Valuation and Insolvency · Pre-Packaged Insolvency Resolution Process

Before PPIRP of Ganga Steels Ltd is initiated, the insolvency professional proposed as resolution professional prepares a report confirming the debtor meets the eligibility requirements. When do his duties under section 54B cease, and what happens to his fees?

The pre-initiation duties cease if the debtor fails to file within the time stated in its declaration, or when the Adjudicating Authority admits or rejects the application. The fees become part of PPIRP costs only if the application is admitted.

  1. AThey cease when the base resolution plan is approved; fees are borne by the creditors
  2. BThey cease if the debtor fails to apply within the declared time or the application is admitted or rejected; fees form part of PPIRP costs if admittedCorrect
  3. CThey continue until liquidation; fees are always borne by the promoters
  4. DThey cease only on rejection of the application; fees form part of PPIRP costs in all cases

Explanation

Section 54B(2) ends the duties if the debtor fails to apply within the time stated in the declaration, or if the application is admitted or rejected. Under 54B(3), the fees form part of PPIRP costs only if the application is admitted.

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