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

In the first meeting of the CoC of Kaveri Steels Ltd, financial creditors holding 70% of the voting share vote to replace the interim resolution professional (IRP) with a proposed professional, Mr Rao. What must the CoC do next under Section 22?

The CoC must file an application before the Adjudicating Authority for Mr Rao's appointment, accompanied by his written consent in the specified form. The 70% vote exceeds the 66% threshold, but the CoC cannot appoint on its own; the Adjudicating Authority appoints after the Board confirms the name.

  1. AAppoint Mr Rao directly and inform the Board afterwards
  2. BFile an application before the Adjudicating Authority for Mr Rao's appointment, with his written consent in the specified formCorrect
  3. CAsk the corporate debtor's board to confirm Mr Rao's appointment
  4. DRequest the Board to appoint Mr Rao without involving the Adjudicating Authority

Explanation

70% exceeds the 66% threshold in Section 22(2), so the replacement resolution is valid. Under Section 22(3)(b), the CoC must file an application before the Adjudicating Authority along with the proposed professional's written consent in the specified form. The CoC cannot appoint him on its own, because the Adjudicating Authority appoints after Board confirmation.

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