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CS Professional · Insolvency and Bankruptcy - Law and Practice · Corporate Insolvency Resolution Process

In a pre-packaged insolvency resolution process, the committee of creditors has approved the resolution plan under section 54K. Which statement about the Adjudicating Authority's handling under section 54L is correct?

Under section 54L, the Adjudicating Authority approves a pre-packaged plan within thirty days of receipt if it is satisfied the plan meets section 30(2) requirements, and it must first check that the plan has provisions for effective implementation. It can reject a non-conforming plan.

  1. AIt may approve the plan within thirty days of receipt if satisfied it meets section 30(2) requirements, after satisfying itself that the plan has provisions for effective implementationCorrect
  2. BIt must approve the plan within seven days of receipt without examining implementation provisions
  3. CIt may approve the plan at any time, as no time limit applies in pre-packs
  4. DIt must approve any plan approved by the committee of creditors, as it has no power to reject it

Explanation

Section 54L(1) requires the Adjudicating Authority, if satisfied that the plan meets section 30(2) requirements, to approve it within thirty days of receipt, and the proviso requires it first to satisfy itself that the plan has provisions for effective implementation. Section 54L(3) also allows rejection if the plan does not conform, so it is not bound to approve every plan.

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