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

Himalaya Foods Ltd's pre-packaged process is converted into CIRP under the Code's provisions. A suspect transfer to an overseas affiliate was made during the pre-pack period. For computing the look-back period for avoidable transactions, what does the Code provide?

The pre-pack period is included when computing the look-back for avoidable transactions, and the insolvency commencement date in the relevant sections is read as the pre-packaged insolvency commencement date. Avoidance proceedings already begun continue during CIRP, so excluding the pre-pack or stopping proceedings is wrong.

  1. AThe duration of the pre-pack process is included in computing the relevant time, and references to insolvency commencement date mean the pre-packaged insolvency commencement dateCorrect
  2. BThe duration of the pre-pack is excluded from the look-back computation
  3. CAvoidance proceedings already initiated must stop on conversion to CIRP
  4. DThe look-back runs only from the date of CIRP order, ignoring the pre-pack

Explanation

Section 54-O(4)(d) reads the insolvency commencement date in sections 43, 46 and 50 as the pre-packaged insolvency commencement date, and (e) includes the pre-pack duration in computing the period. Under (c), avoidance proceedings continue.

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