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CS Professional · Corporate Restructuring, Valuation and Insolvency · Types of Corporate Restructuring

Kaveri Components Ltd has a scheme of compromise with its creditors. Creditors holding 92% in value of a class of creditors have confirmed the scheme by way of affidavit. What can the Tribunal do regarding the meeting of that class?

The Tribunal may dispense with calling the meeting of that class. Where creditors having at least ninety per cent in value agree and confirm the scheme by affidavit, the power to dispense is available, and 92% satisfies that requirement.

  1. AIt must still order the meeting, as a meeting is mandatory in all cases
  2. BIt may dispense with calling a meeting of that class of creditorsCorrect
  3. CIt may dispense with the meeting only if 100% of the creditors confirm by affidavit
  4. DIt may dispense with the meeting only if the company is being wound up

Explanation

Section 230(9) permits the Tribunal to dispense with a meeting of creditors or class of creditors where creditors having at least ninety per cent value agree and confirm by affidavit. 92% exceeds the threshold, so dispensation is possible. The 100% and winding-up conditions are not in the provision.

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