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

Mr. Arvind Rao, a bankruptcy trustee, has finished administering and distributing the estate of the bankrupt, Mr. Sethi, under Chapter V. What must the trustee do next under Section 137?

On completing administration and distribution of the estate, the bankruptcy trustee must convene a meeting of the committee of creditors and present a report of the administration of the estate to it. Release and discharge follow only after the committee deals with that report.

  1. AConvene a meeting of the committee of creditors and give it a report of the administration of the estateCorrect
  2. BFile the report directly with the Adjudicating Authority without any meeting
  3. CApply to the Board for his own release
  4. DWait for the one-year period from bankruptcy commencement to expire before taking any step

Explanation

Section 137(1) requires the trustee to convene a meeting of the committee of creditors on completion of administration and distribution. Under 137(2) he must provide a report of the administration at that meeting. The other options skip this mandatory step.

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