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

During the PPIRP of Narmada Chemicals Ltd, the committee of creditors holds 100 voting shares. Before approval of a resolution plan, it wants to resolve to initiate a regular CIRP, assuming the debtor is eligible under Chapter II. What is the minimum votes needed?

The committee of creditors needs a vote of not less than sixty-six per cent of the voting shares to resolve to initiate a CIRP during a pre-packaged process. With 100 voting shares, that is 66. A simple majority of 51 or the 75 needed for fast track extension is insufficient or irrelevant.

  1. A51 voting shares
  2. B66 voting sharesCorrect
  3. C75 voting shares
  4. D90 voting shares

Explanation

Section 54-O(1) requires a vote of not less than sixty-six per cent of the voting shares, so 66 out of 100. 51 is a simple majority and 75 is the fast track extension threshold under section 56, so both are wrong.

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