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CS Professional · Insolvency and Bankruptcy - Law and Practice · Group Insolvency

Beta Infra Ltd and Beta Realty Ltd are both in separate CIRPs before the same NCLT. Their cases are heard together in a coordinated way, but Beta Infra's assets are kept apart from Beta Realty's and creditors of each are paid only from their own debtor's estate. Which concept describes this arrangement?

This is procedural coordination without substantive consolidation. The proceedings are managed together for efficiency, but each company's assets and creditors stay separate and each estate pays only its own creditors. Pooling the estates would amount to substantive consolidation, which has not occurred here.

  1. AProcedural coordination without substantive consolidationCorrect
  2. BSubstantive consolidation
  3. CPre-packaged insolvency resolution
  4. DVoluntary liquidation

Explanation

Coordinating the hearings while keeping each estate separate is procedural coordination. In substantive consolidation the assets and liabilities would be pooled into one estate. Option 1 is wrong because the estates stay separate here and are not pooled.

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