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CS Professional · Corporate Restructuring, Valuation and Insolvency · Voluntary Liquidation

Kaveri Textiles Pvt Ltd owes lenders Rs 10 crore. Its members passed a special resolution on 3 March appointing CS Ritu Menon, an insolvency professional, as liquidator. Within what time must creditors representing two-thirds in value of the debt approve this resolution?

Creditors holding two-thirds in value of the company's debt must approve the resolution within seven days of its passing. The four-week period applies instead to the members' resolution after the directors' declaration, so it does not govern the creditors' approval.

  1. AWithin seven days of the resolutionCorrect
  2. BWithin four weeks of the resolution
  3. CWithin fourteen days of the resolution
  4. DWithin thirty days of the resolution

Explanation

Where the company owes any debt, creditors representing two-thirds in value of the debt must approve the members' resolution within seven days of that resolution. The four-week period is the window for passing the members' resolution after the directors' declaration, so it is the wrong period here.

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