Skip to content

CS Professional · Insolvency and Bankruptcy - Law and Practice · Pre-Packaged Insolvency Resolution Process (Elective 7.5)

Sri Venkatesh Packaging Pvt Ltd, an MSME, is in a pre-packaged insolvency resolution process. The committee of creditors has not approved any resolution plan by the end of the 90th day from the pre-packaged insolvency commencement date. What must the resolution professional do?

The resolution professional must file an application with the Adjudicating Authority for termination of the pre-packaged process on the day after the ninety-day period expires, because no plan was approved by the committee of creditors within that period, as section 54D(3) requires.

  1. AFile an application with the Adjudicating Authority for termination of the process on the day after the 90 days expireCorrect
  2. BWait until the 120th day and then file for liquidation
  3. CContinue the process for another 90 days without any application
  4. DConvert the process into a corporate insolvency resolution process by a notice to creditors

Explanation

Section 54D(3) requires the resolution professional, where no plan is approved within the 90-day period, to file an application for termination on the day after that period expires. Waiting until day 120 is wrong because the duty arises at day 90 plus one.

Did you get it right without looking?

One question tells you little. A timed set on Pre-Packaged Insolvency Resolution Process (Elective 7.5) shows your real accuracy, how long you take and where you lose marks.

Practise Pre-Packaged Insolvency Resolution Process (Elective 7.5)Free diagnostic mock

More Pre-Packaged Insolvency Resolution Process (Elective 7.5) questions