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CS Professional · Corporate Restructuring, Valuation and Insolvency · Cross Border Insolvency

During the corporate insolvency resolution process of Kaveri Textiles Ltd, the resolution professional learns that the company owns warehouse stock in a foreign country with which India has made reciprocal arrangements under section 234 of the Code. He needs evidence relating to that stock. What should he do under the Code?

The resolution professional must apply to the Adjudicating Authority. If it is satisfied that evidence or action on the foreign assets is needed, it may issue a letter of request to a competent court or authority of the reciprocating country. The RP has no power to issue it himself.

  1. AApply to the Adjudicating Authority, which may issue a letter of request to a competent court or authority of that countryCorrect
  2. BDirectly issue a letter of request to the foreign court without any application
  3. CApply to the Insolvency and Bankruptcy Board to send a letter of request abroad
  4. DWait for the committee of creditors to approve a resolution authorising foreign action

Explanation

Under section 235, the resolution professional, if of the opinion that assets are in a country with reciprocal arrangements, applies to the Adjudicating Authority. If satisfied that evidence or action is required, the Adjudicating Authority may issue the letter of request. The RP cannot issue it himself, so the direct-issue option is wrong.

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