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CS Professional · Insolvency and Bankruptcy - Law and Practice · Professional and Ethical Practices for Insolvency Practitioners

Meera Iyer, an insolvency professional, is appointed resolution professional of Kaveri Textiles Ltd. The 180-day period of the corporate insolvency resolution process has ended, but the Adjudicating Authority has not yet passed an order approving the resolution plan or appointing a liquidator. Which statement about her position is correct?

Meera continues to manage the corporate debtor's operations even after the process period expires. Under section 23, the resolution professional remains in charge until the Adjudicating Authority passes an order approving the resolution plan or appointing a liquidator, so no fresh creditor resolution is needed.

  1. AShe must stop managing the operations of the corporate debtor because the process period has ended
  2. BShe continues to manage the operations of the corporate debtor until the Adjudicating Authority passes an order approving the plan or appointing a liquidatorCorrect
  3. CShe continues only if the committee of creditors passes a fresh resolution extending her term
  4. DManagement automatically reverts to the erstwhile board of directors until the order is passed

Explanation

Section 23 provides that the resolution professional conducts the process and manages the corporate debtor's operations. Its proviso says she continues to manage operations after the process period expires until an order approving the resolution plan or appointing a liquidator is passed. Reverting to the board or needing a fresh CoC resolution has no basis in the section.

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