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CS Professional · Corporate Restructuring, Valuation and Insolvency · Types of Corporate Restructuring

Sagar Pharma Ltd proposes a scheme of arrangement. Creditors holding 92% in value of a class of creditors have confirmed the scheme by way of affidavit. What may the Tribunal do under Section 230?

The Tribunal may dispense with calling a meeting of that class of creditors. Section 230(9) permits this where creditors having at least ninety per cent in value agree and confirm the scheme by affidavit, and ninety-two per cent clears that threshold.

  1. ADispense with calling a meeting of that class of creditorsCorrect
  2. BSanction the scheme without any auditor's certificate on accounting treatment
  3. CBind only the creditors who signed the affidavit
  4. DRequire a fresh vote by postal ballot before sanction

Explanation

Section 230(9) lets the Tribunal dispense with a meeting of a creditor class where creditors with at least 90% in value agree and confirm by affidavit. 92% meets this. The auditor's certificate on accounting standards remains mandatory under the proviso to 230(7), so the second option is wrong.

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