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

In a bankruptcy matter, a trustee finds that a personal guarantor of corporate debtor Sahyadri Infra Ltd holds property in a reciprocating country. Which reading of section 235(1) is correct?

The trustee may apply to the Adjudicating Authority, because section 235(1) expressly covers assets of a debtor including a personal guarantor of a corporate debtor, and lists the bankruptcy trustee as an applicant. No Board approval is required, and the section is not limited to companies.

  1. AThe trustee may apply to the Adjudicating Authority because the section covers assets of a personal guarantor of a corporate debtorCorrect
  2. BThe section cannot apply because it covers only companies
  3. CThe guarantor himself must apply to the foreign court
  4. DThe trustee must first obtain the Board's approval before applying

Explanation

Section 235(1) refers to assets of the corporate debtor or debtor, including a personal guarantor of a corporate debtor, and names the bankruptcy trustee as an applicant. So the trustee applies to the Adjudicating Authority. The companies-only option ignores the express reference, and no Board approval is mentioned.

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