CS Professional · Insolvency and Bankruptcy - Law and Practice · Group Insolvency
Delta Ltd and its subsidiary Delta Foods Ltd are both undergoing CIRP before the same NCLT bench. Delta Foods Ltd's resolution professional is a different person from Delta's. Under the group insolvency approach recommended in India, what would a common insolvency professional be intended to achieve?
A common insolvency professional would reduce duplication and coordinate the two proceedings, giving consistent handling across the group. The professional still owes duties to each debtor's estate and creditors separately, so the companies stay legally distinct and neither is merged nor are creditor committees dispensed with.
- AMerge the two companies into one legal entity
- BRemove the need for a Committee of Creditors in either case
- CMake all creditors of the two companies into a single class
- DReduce duplication and coordinate the two processes, while the IP continues to owe duties to each debtor's estate separatelyCorrect
Explanation
A common IP is a coordination tool that improves efficiency and consistency of the two proceedings. The IP must still act for each debtor and each CoC separately, so the legal separateness of the companies remains. Option 1 is wrong because appointing a common IP does not merge entities.
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