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CS Professional · Insolvency and Bankruptcy - Law and Practice · Fresh Start Process

In a fresh start matter, the Board has confirmed the resolution professional named in the debtor's application. Later, a creditor believes the professional should be replaced. Which sequence correctly reflects the Code?

The creditor applies to the Adjudicating Authority, which refers the matter to the Board within seven days. The Board recommends a name within ten days, and the Adjudicating Authority appoints the new professional. Section 89 allows both debtor and creditor to apply, and the Board cannot replace without the Adjudicating Authority.

  1. ACreditor applies to the Adjudicating Authority; the Adjudicating Authority refers to the Board within seven days; the Board recommends a name within ten days; the Adjudicating Authority appoints the new professionalCorrect
  2. BCreditor applies directly to the Board; the Board replaces the professional within ten days without any order
  3. CCreditor cannot seek replacement because only the debtor may apply under Section 89
  4. DCreditor applies to the Adjudicating Authority; the Adjudicating Authority refers to the Board within ten days; the Board recommends a name within seven days

Explanation

Section 89 allows the debtor or the creditor to apply to the Adjudicating Authority. It must refer to the Board within seven days, the Board recommends an insolvency professional with no pending disciplinary proceedings within ten days, and the Adjudicating Authority appoints the new professional. The reversed timelines in the last option are wrong. The Board has no power to replace on its own.

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