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CS Professional · Insolvency and Bankruptcy - Law and Practice · Voluntary Liquidation of Companies

In the voluntary liquidation of Orion Cables Ltd, liquidator Priya Nair asks the company's staff for records and help in managing its affairs. Which statement is correct under the Code?

The company's personnel must extend all assistance and cooperation the liquidator requires in managing its affairs, with section 19 applying as if the liquidator were the interim resolution professional. No prior tribunal direction is needed, and the duty is not limited to directors or made voluntary.

  1. APersonnel of the company must extend all assistance and cooperation to the liquidator as requiredCorrect
  2. BPersonnel need cooperate only after the Adjudicating Authority issues a specific direction
  3. CCooperation is required only from directors, not other personnel
  4. DCooperation is voluntary since the process is initiated by the company itself

Explanation

Section 34(3) requires the personnel of the corporate debtor to extend all assistance and cooperation the liquidator requires in managing its affairs, and applies section 19 to voluntary liquidation with references to the liquidator replacing the interim resolution professional. No prior direction is needed, and it is not limited to directors.

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