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CS Professional · Insolvency and Bankruptcy - Law and Practice · Resolution Strategies (Elective 7.5)

In a pre-packaged insolvency resolution process of Meera Pharma Ltd, no resolution plan has been approved by the CoC within 90 days from the pre-packaged insolvency commencement date. What must the RP do?

The RP must file an application with the Adjudicating Authority for termination of the pre-packaged process on the day after the 90-day period expires, since no plan was approved by the CoC within that period.

  1. AWait until day 120 and then do nothing, as the process lapses automatically
  2. BFile an application with the Adjudicating Authority for termination of the process on the day after the expiry of the 90-day periodCorrect
  3. CConvert the process into liquidation without any application
  4. DAsk the CoC to extend the 90 days by a simple majority

Explanation

Section 54D(3) requires the RP, where no plan is approved within the 90-day period in section 54D(2), to file a termination application on the day after that period expires. Under section 54N(1), the Adjudicating Authority then decides within thirty days. The process does not lapse automatically, and the section gives no CoC power to extend.

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