Skip to content

CS Professional · Corporate Restructuring, Valuation and Insolvency · Role, Functions and Duties of IP, IRP and RP

During a pre-packaged insolvency resolution process, the resolution professional of Orion Metals Pvt Ltd finds that the Board of Directors has breached an obligation imposed on it under the pre-pack Chapter. Under Section 54F(2), which step is he required to take, and which is NOT among his listed duties?

He must inform the committee of creditors of the breach. Section 54F(2)(e) gives him this duty, but the section gives no duty to remove directors or appoint a new Board. His role is to monitor management, not take it over.

  1. AInform the committee of creditors of the breach; he is not listed as required to remove the directors himselfCorrect
  2. BInform the committee of creditors of the breach; he is also required to appoint a new Board
  3. CRemove the directors immediately and take over the Board's powers
  4. DReport the breach to the members at a general meeting and await their instruction

Explanation

Section 54F(2)(e) lists a duty to inform the committee of creditors in the event of breach of the Board's obligations. It gives no duty to remove directors or appoint a new Board; under (2)(d) he monitors management of the affairs. Reporting to members is not provided for.

Did you get it right without looking?

One question tells you little. A timed set on Role, Functions and Duties of IP, IRP and RP shows your real accuracy, how long you take and where you lose marks.

Practise Role, Functions and Duties of IP, IRP and RPFree diagnostic mock

More Role, Functions and Duties of IP, IRP and RP questions