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CS Professional · Corporate Restructuring, Valuation and Insolvency · Resolution Strategies

The 330-day CIRP period of Sagar Steels Ltd has expired, 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 CIRP period expires, until the Adjudicating Authority passes an order approving the resolution plan or appointing a liquidator. Expiry of the period alone does not return management to the board.

  1. AThe suspended board of directors, as the CIRP period has ended
  2. BThe resolution professional, until an order approving the plan or appointing a liquidator is passedCorrect
  3. CThe committee of creditors directly through its largest financial creditor
  4. DThe interim resolution professional, who automatically resumes charge

Explanation

The proviso to Section 23(1) says the resolution professional continues to manage operations after the CIRP period expires, until an order approving the plan under section 31(1) or appointing a liquidator under section 34 is passed. The board does not regain control merely because the period lapsed.

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