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CS Professional · Corporate Restructuring, Valuation and Insolvency · Convening and Conduct of Meetings of Committee of Creditors

In the CIRP of Kaveri Steels Ltd, the operational creditors' aggregate dues are Rs 18 crore against total debt of Rs 150 crore. Which statement about notice of COC meetings to operational creditors is correct under section 24?

Notice must be given to the operational creditors or their representatives. Their aggregate dues of Rs 18 crore are 12 per cent of the Rs 150 crore debt, which is not less than the ten per cent threshold in section 24. They may attend through one representative but cannot vote.

  1. ANotice must be given, because their dues are not less than ten per cent of the debtCorrect
  2. BNotice is not required, because operational creditors are never entitled to notice
  3. CNotice is required only if the dues are at least fifty per cent of the debt
  4. DNotice is required only if they hold voting rights in the COC

Explanation

Section 24(3)(c) requires notice to operational creditors or their representatives if their aggregate dues are not less than ten per cent of the debt. Rs 18 crore of Rs 150 crore is 12 per cent, which meets the threshold. One representative may attend but cannot vote.

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