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CS Professional · Corporate Restructuring, Valuation and Insolvency · Fast Track Mergers

In a fast track merger, Orion Pumps Ltd (transferee) convenes a creditors' meeting on 21 days' notice with the scheme. Creditors representing what level of approval are needed, as against a regular NCLT merger?

Creditors representing a majority of nine-tenths in value, of each company's creditors or class of creditors, must approve, either at a meeting called on twenty-one days' notice with the scheme or otherwise in writing. The solvency declaration is additional, not a substitute.

  1. AA majority representing nine-tenths in value of creditors or class of creditors, or approval in writingCorrect
  2. BA majority representing three-fourths in value of creditors present and voting
  3. CUnanimous consent of all creditors
  4. DNo creditor approval is required since solvency is declared

Explanation

Section 233(1)(d) requires a majority representing nine-tenths in value of the creditors or class of creditors, at a meeting on 21 days' notice or otherwise approved in writing. The declaration of solvency is a separate requirement and does not replace creditor approval.

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