CS Professional · Insolvency and Bankruptcy - Law and Practice · Liquidation of Corporate Person
In the liquidation of Raghav Polymers Ltd, the liquidator is filing the application with the final report. Avoidance transactions under Chapter III of Part II are still pending and will not be finished before dissolution. Under the Liquidation Process Regulations as amended up to September 2026, what must the liquidator do?
The liquidator must state in the final report application how the avoidance proceedings will be pursued after dissolution and how proceeds will be distributed, with the committee's approval. The amended regulation 44A requires approval, not merely advice, and does not let such proceedings lapse.
- AWithdraw the avoidance applications as they lapse on dissolution
- BInclude in the application how such proceedings will be pursued after dissolution and how proceeds will be distributed, with committee approvalCorrect
- CObtain the Board's sanction to continue the proceedings after dissolution
- DDistribute any future proceeds equally among all stakeholders without any provision
Explanation
Regulation 44A requires the liquidator, with the approval of the committee, to provide in the application filed with the final report the manner in which avoidance or fraudulent and wrongful trading proceedings will be pursued after dissolution or closure, and how proceeds will be distributed. The amendment replaced 'on the advice' with 'with the approval'. Proceedings do not simply lapse.
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