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CS Professional · Insolvency and Bankruptcy - Law and Practice · Corporate Insolvency Resolution Process

Sunrise Textiles Ltd is under CIRP. The committee of creditors (CoC) is dissatisfied with the resolution professional (RP) appointed under section 22 and wants to replace him with another insolvency professional who has given written consent in the specified form. What voting threshold must the CoC meet at its meeting to resolve on the replacement?

The CoC needs a vote of 66% of voting shares to replace the resolution professional, along with written consent from the proposed professional in the specified form. A simple majority is insufficient, and the Code does not require 75% or 90% for this purpose.

  1. A51% of voting shares
  2. B66% of voting sharesCorrect
  3. C75% of voting shares
  4. D90% of voting shares

Explanation

Under section 27(2), the CoC may at a meeting resolve to replace the RP by a vote of sixty-six per cent of voting shares, subject to written consent from the proposed RP. A simple majority of 51% is not enough for replacement. Higher figures like 75% or 90% are not the statutory requirement.

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