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CS Professional · Corporate Restructuring, Valuation and Insolvency · Preparation and Approval of Resolution Plan

Resolution applicant Zenith Infra Pvt Ltd submits a plan for Ganga Cement Ltd, which was submitted to the Adjudicating Authority after 4 July 2025. The plan proposes assigning to Zenith certain avoidance transactions that were neither disclosed in the information memorandum nor intimated to all prospective resolution applicants before the last date for submission of plans. Which is correct under Regulation 38?

The plan cannot provide for the assignment. Regulation 38(2A) prohibits assigning avoidance or wrongful trading proceedings that were neither disclosed in the information memorandum nor intimated to all prospective applicants before the submission deadline. The exemption only protects plans submitted before the Fifth Amendment 2025 commenced.

  1. AThe plan cannot provide for such assignment, as sub-regulation (2A) bars itCorrect
  2. BThe plan may do so if the CoC approves it by 66% voting share
  3. CThe plan may do so if Zenith pays the Adjudicating Authority a fee
  4. DThe plan may do so because the bar applies only to plans submitted before the Fifth Amendment

Explanation

Regulation 38(2A) bars assignment of avoidance or wrongful trading proceedings not disclosed in the information memorandum and not intimated to all prospective applicants. The proviso exempts only plans submitted on or before commencement of the Fifth Amendment Regulations, 2025, so it does not help here; CoC voting does not override the bar.

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