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CS Professional · Corporate Restructuring, Valuation and Insolvency · Application for Corporate Insolvency Resolution Process

During a PIRP of Kaveri Engineering Ltd, the committee of creditors wishes to switch to a regular corporate insolvency resolution process before the resolution plan is approved. Assuming the debtor is eligible under Chapter II, what is the minimum voting requirement to resolve this?

The committee of creditors must pass the resolution by a vote of not less than sixty-six per cent of the voting shares, at any time after the pre-packaged commencement date and before the resolution plan is approved, and only if the debtor is eligible for CIRP under Chapter II.

  1. ANot less than sixty-six per cent of the voting sharesCorrect
  2. BNot less than fifty-one per cent of the voting shares
  3. CNot less than seventy-five per cent of the voting shares
  4. DUnanimous vote of all financial creditors

Explanation

Section 54-O(1) permits the CoC, after the pre-packaged commencement date but before plan approval, to resolve to initiate CIRP by a vote of not less than sixty-six per cent of voting shares. The 75 per cent figure appears for extending fast track CIRP in section 56, so it is a distractor here.

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