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

Sunrise Textiles Ltd, an MSME corporate debtor, is in a pre-packaged insolvency resolution process. The resolution professional (RP) wants to see the company's books of account and attend meetings of its Board of Directors. The managing director says the Board continues to manage the company, so the RP has no such right. Under the Code, what is the correct position?

The RP has a statutory power to access all books of account, records and information of the corporate debtor and to attend meetings of members, the Board and its committees. No creditor vote or tribunal order is needed, so the managing director's objection fails.

  1. AThe RP may access all books of account and records and attend meetings of members, the Board and committees of directorsCorrect
  2. BThe RP may access books only after the committee of creditors passes a resolution by 66% voting
  3. CThe RP may attend only meetings of members, not Board meetings
  4. DThe RP may access books only through an order of the Adjudicating Authority

Explanation

Section 54F(3) gives the RP the power to access all books of account, records and information of the corporate debtor and to attend meetings of members, Board of Directors and committee of directors. No CoC resolution or tribunal order is required. The distractors add conditions the Code does not impose.

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