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CS Professional · Corporate Restructuring, Valuation and Insolvency · Convening and Conduct of Meetings of Committee of Creditors

Meera, the resolution professional of Kaveri Textiles Ltd, finds that members of the committee holding only 30% of the voting rights have joined the first scheduled CoC meeting by video conferencing. The committee has made no earlier decision on the point and has not changed the quorum percentage. What is the position?

The meeting is not quorate because 30% is below the 33% voting-rights threshold. Unless the committee previously decided otherwise, it automatically stands adjourned to the same time and place on the next day, and not for seven days.

  1. AThe meeting is quorate because more than one-fourth of the voting rights are present
  2. BThe meeting is not quorate and automatically stands adjourned to the same time and place on the next dayCorrect
  3. CThe meeting is not quorate and must be adjourned for seven days
  4. DThe meeting can proceed because video conferencing attendance does not count towards quorum rules

Explanation

Quorum requires members representing at least 33% of voting rights, present in person or by video conferencing. Only 30% is present, so there is no quorum. Unless the committee decided otherwise earlier, the meeting automatically stands adjourned to the same time and place on the next day. The seven-day adjournment limit is for the bankruptcy trustee's creditors' meeting, not this situation.

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