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

Sundaram Textiles Ltd's application for a pre-packaged insolvency resolution process (PPIRP) is admitted by the Adjudicating Authority. Which statement correctly describes the moratorium that follows?

The Adjudicating Authority declares the moratorium on the pre-packaged insolvency commencement date along with the admission order. It runs from the date of that order until the PPIRP period comes to an end, as section 54E provides.

  1. AIt is declared on the pre-packaged insolvency commencement date along with the order of admission and lasts until the PPIRP period comes to an endCorrect
  2. BIt is declared only after the committee of creditors approves the base resolution plan and lasts for 30 days
  3. CIt is declared by the resolution professional after the public announcement and lasts until the plan is approved by creditors
  4. DIt is declared on the pre-packaged insolvency commencement date but ceases once the resolution professional takes charge of the debtor

Explanation

Under section 54E, the Adjudicating Authority declares the moratorium on the commencement date along with the admission order. The order has effect from its date until the PPIRP period ends. The other options wrongly assign the declaration to the creditors or the resolution professional, or invent a different duration.

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