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CS Professional · Corporate Restructuring, Valuation and Insolvency · Pre-Packaged Insolvency Resolution Process

Prakash Tools Pvt Ltd, an MSME, is in a pre-packaged insolvency resolution process (PIRP). The committee of creditors (CoC) has not approved any resolution plan within the period of ninety days from the pre-packaged insolvency commencement date. What must the resolution professional do?

The resolution professional must file an application for termination with the Adjudicating Authority on the day after the ninety-day period expires, because Section 54D(3) ties the filing to the ninety-day plan-submission deadline, not the 120-day overall limit.

  1. AFile an application for termination of the PIRP on the day after the ninety days expireCorrect
  2. BWait until the 120th day and then file for termination
  3. CConvert the process into liquidation without approaching the Adjudicating Authority
  4. DSeek a mandatory extension of ninety days from the CoC

Explanation

Under Section 54D(3), where no plan is approved by the CoC within ninety days, the resolution professional must file a termination application on the day after that period expires. Waiting until day 120 is wrong because the 120 days is the overall completion limit, not the trigger for filing.

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