Skip to content

CS Professional · Corporate Restructuring, Valuation and Insolvency · Preparation and Approval of Resolution Plan

In the resolution of Narmada Steels Ltd, the CoC proposes that the resolution professional, CS Arvind Rao, join the monitoring committee after plan approval. During the CIRP he was receiving a monthly fee of Rs 4,00,000. Under Regulation 38, what is the position on his fee as a monitoring committee member?

His monthly fee as a monitoring committee member must not exceed the monthly fee he received during the corporate insolvency resolution process, here Rs 4,00,000. The regulation caps the fee at the CIRP level, so no increase or unrestricted fee is permitted.

  1. AThe monthly fee must not exceed Rs 4,00,000Correct
  2. BThe fee must be at least Rs 4,00,000 plus 10% for added duties
  3. CThe fee may be freely fixed by the resolution applicant without any limit
  4. DThe RP cannot be paid any fee after plan approval

Explanation

The proviso to Regulation 38(4)(b) states that where the RP is proposed to be part of the monitoring committee, his monthly fee shall not exceed the monthly fee received during the CIRP. So the cap is Rs 4,00,000. Options allowing a higher or unlimited fee contradict this.

Did you get it right without looking?

One question tells you little. A timed set on Preparation and Approval of Resolution Plan shows your real accuracy, how long you take and where you lose marks.

Practise Preparation and Approval of Resolution PlanFree diagnostic mock

More Preparation and Approval of Resolution Plan questions