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CS Professional · Insolvency and Bankruptcy - Law and Practice · Group Insolvency

Eta Ltd and Theta Ltd are group companies in separate CIRPs. To avoid duplicated costs, the Tribunal appoints the same insolvency professional as IRP for both. Which statement about this arrangement is most accurate?

Appointing the same IP for two group companies is a procedural coordination step. It does not merge the estates, so the IP must keep separate records, claims and committees of creditors for each company and manage any conflict of interest between their creditors.

  1. AIt is wrong, as one IP can never be appointed for two debtors under the Code
  2. BIt makes the two estates legally one, so claims are pooled
  3. CIt is a procedural coordination measure; the IP must keep each company's estate, records and CoC separate and manage any conflict of interestCorrect
  4. DIt requires the IP to hold a single CoC for both companies by law

Explanation

Common appointment is used to coordinate proceedings and save cost, but it does not merge the debtors. The IP must maintain separate books, claims and CoC for each company and watch for conflicts between the creditors of the two entities. Pooling of claims or a mandatory single CoC does not follow from the appointment.

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