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CS Professional · Corporate Restructuring, Valuation and Insolvency · Application for Corporate Insolvency Resolution Process

In a PPIRP of Kaveri Auto Components Ltd, the Adjudicating Authority admits the application on the pre-packaged insolvency commencement date. Which of the following must it do along with the order of admission?

Along with the admission order on the pre-packaged commencement date, the Adjudicating Authority must declare a moratorium, appoint a resolution professional, and cause that professional to make a public announcement of the process immediately after appointment. It does not order liquidation or defer the moratorium.

  1. ADeclare a moratorium and cause a public announcement to be made by the resolution professional immediately after his appointmentCorrect
  2. BOrder liquidation of the corporate debtor and appoint a liquidator
  3. CDirect the promoters to hand over management to the committee of creditors without appointing anyone
  4. DPostpone the moratorium until the committee of creditors approves a resolution plan

Explanation

Section 54E(1) requires the Adjudicating Authority, with the admission order, to declare a moratorium, appoint a resolution professional, and have the RP make a public announcement immediately after appointment. Liquidation or postponing the moratorium is not provided.

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