CS Professional · Corporate Restructuring, Valuation and Insolvency · Resolution Strategies
In a pre-packaged process for Yamuna Polymers Ltd, a competing plan selected by the CoC under Section 54K(9) is not considered significantly better than the base plan, so it competes with the base plan under sub-section (11). One of them is selected for approval, but the CoC fails to approve the selected plan by the required vote. What follows?
The resolution professional must file an application for termination of the pre-packaged insolvency resolution process. The proviso to Section 54K(12) requires this where the plan selected after competing under sub-section (11) fails to get CoC approval.
- AThe Adjudicating Authority approves the base plan automatically
- BThe resolution professional files an application for termination of the pre-packaged insolvency resolution processCorrect
- CThe CoC must select the other plan, which is then deemed approved
- DThe moratorium ceases and the promoters resume control
Explanation
The proviso to Section 54K(12) states that where the plan selected under sub-section (11) is not approved by the CoC, the resolution professional shall file an application for termination of the pre-packaged process. No automatic approval or deemed selection of the other plan exists.
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