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CS Professional · Corporate Restructuring, Valuation and Insolvency · Pre-Packaged Insolvency Resolution Process

In a PPIRP of Kaveri Textiles Ltd, the commencement date was 10 January. No resolution plan was approved by the CoC within 90 days of that date. What must the resolution professional do?

If the CoC has not approved a plan within ninety days, the resolution professional must, on the following day, apply to the Adjudicating Authority for termination of the pre-packaged process. The Code gives no automatic conversion or CoC extension in this situation.

  1. AWait until day 120 and then seek an extension from the CoC
  2. BConvert the process into a corporate insolvency resolution process automatically
  3. COn the day after the 90-day period expires, file an application with the Adjudicating Authority for termination of the PPIRPCorrect
  4. DAsk the corporate debtor to file a fresh base resolution plan for approval by members

Explanation

Under section 54D(3), where no plan is approved by the CoC within the 90-day period, the RP must file an application for termination on the day after that period expires. There is no automatic conversion and no CoC extension route in this provision. Waiting until day 120 is wrong because the duty arises the day after day 90.

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