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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 Textiles Ltd, a financial creditor, Bank A, is a member of the committee of creditors. Bank A wants an insolvency professional other than the resolution professional to attend and represent it at a CoC meeting. Who bears the fees of that insolvency professional?

Bank A bears the fees. A CoC member may appoint an insolvency professional other than the resolution professional to represent it in a meeting, and the Code provides that the fees for representing an individual creditor are borne by that creditor alone.

  1. AThe corporate debtor, as part of the CIRP costs
  2. BBank A, the creditor who appointed the professionalCorrect
  3. CAll members of the committee of creditors in proportion to their voting share
  4. DThe resolution professional, out of his own fee

Explanation

Under section 24(5), a creditor who is a CoC member may appoint an insolvency professional other than the resolution professional to represent it, and the fees payable to such professional representing an individual creditor are borne by that creditor. The option shifting costs to the CIRP or other members is therefore wrong.

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