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CS Professional · Corporate Restructuring, Valuation and Insolvency · Role, Functions and Duties of IP, IRP and RP

Sunrise Textiles Ltd is undergoing a corporate insolvency resolution process. The 180-day period is about to expire, but the Adjudicating Authority has not yet passed an order on the resolution plan placed before it. Who manages the operations of the corporate debtor in the interim?

The resolution professional continues to manage the corporate debtor's operations after the process period expires. This continues until the Adjudicating Authority passes an order approving the resolution plan or appointing a liquidator, so there is no gap in management.

  1. AThe suspended Board of Directors, until the order is passed
  2. BThe resolution professional, until an order approving the plan or appointing a liquidator is passedCorrect
  3. CThe committee of creditors acting through its largest financial creditor
  4. DThe resolution professional's authority ends on expiry of the period, and the operations are left unmanaged

Explanation

Under Section 23, the proviso says the resolution professional continues to manage the operations of the corporate debtor after the process period expires, until an order approving the plan under section 31(1) or appointing a liquidator under section 34 is passed. The Board is suspended, so the first option is wrong, and the CoC does not manage operations.

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