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CS Professional · Corporate Restructuring, Valuation and Insolvency · Resolution Strategies

Mehta Auto Ltd's CIRP period has expired, but the Adjudicating Authority has not yet passed an order approving a resolution plan or appointing a liquidator. Who manages the operations of the corporate debtor in this interval?

The resolution professional continues to manage the corporate debtor's operations. Under section 23, this continues after the CIRP period expires until the Adjudicating Authority passes an order approving the resolution plan or appointing a liquidator. Control does not revert to the board or promoters.

  1. AThe suspended board of directors, since the CIRP period has ended
  2. BThe committee of creditors acting through its chairperson
  3. CThe resolution professional, who continues to manage operations until such an order is passedCorrect
  4. DThe promoters, until the Adjudicating Authority nominates a liquidator

Explanation

Section 23 provides that the resolution professional continues to manage the operations of the corporate debtor after expiry of the CIRP period, until an order approving the resolution plan under section 31(1) or appointing a liquidator under section 34 is passed. Handing control to the board or promoters would contradict this proviso.

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