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CS Professional · Corporate Restructuring, Valuation and Insolvency · Resolution Strategies

In the CIRP of Narmada Steels Ltd, two applicants submit plans: Applicant A for the whole company and Applicant B only for the company's power plant and a mining lease. Which statement reflects Regulation 37?

A plan may provide for sale of one or more assets to one or more successful resolution applicants who submit plans for those assets, together with the manner of dealing with remaining assets. Regulation 37 therefore recognises asset-wise plans within CIRP, without needing liquidation or share cancellation.

  1. AA plan can provide for sale of one or more assets to one or more successful applicants who submit plans for such assets, along with the manner of dealing with remaining assetsCorrect
  2. BOnly one plan covering the entire company can ever be considered
  3. CAsset-wise plans are valid only in liquidation, not in CIRP
  4. DA plan for part of the assets is valid only if the shares are cancelled

Explanation

Clause (m) of Regulation 37 allows sale of one or more assets of the corporate debtor to one or more successful resolution applicants submitting plans for such assets, and the manner of dealing with the remaining assets. So an asset-wise plan is a recognised measure inside CIRP. Share cancellation is not a precondition.

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