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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 in Pune, has finished administering and distributing the estate of a bankrupt individual in line with Chapter V. Which step does Section 137 require him to take next?

On completing administration and distribution of the bankrupt's estate, the trustee must convene a meeting of the committee of creditors and give it a report of the administration. The committee then considers approval and release. The trustee cannot release himself or skip the meeting.

  1. AApply directly to the Board for his own release
  2. BConvene a meeting of the committee of creditors and present a report of the administrationCorrect
  3. CFile the final accounts with the bankrupt and close the file
  4. DWait for one year to pass and then convene a meeting of creditors

Explanation

Under Section 137(1) the trustee must convene a meeting of the committee of creditors on completion of administration and distribution. Under 137(2) he provides a report of the administration at that meeting. Release is decided by the committee, not by the trustee applying to the Board, and no one-year wait is needed for the meeting.

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