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CS Professional · Insolvency and Bankruptcy - Law and Practice · Resolution Strategies (Elective 7.5)

The CoC of Orion Pharma Ltd resolves to replace the IRP with Ms. Iyer and files the application. The Adjudicating Authority forwards her name to the Board. The Board does not confirm her name within ten days of receipt. What is the consequence under Section 22?

The Adjudicating Authority must order the interim resolution professional to continue as resolution professional until the Board confirms the proposed professional. There is no deemed appointment after ten days and no suspension of CIRP. Section 22(5) ensures continuity of management while confirmation is pending.

  1. AMs. Iyer is deemed appointed as RP after ten days
  2. BThe CoC must restart the process with a fresh vote and the CIRP is suspended
  3. CThe Adjudicating Authority directs the IRP to continue as RP until the Board confirms Ms. Iyer's appointmentCorrect
  4. DThe corporate debtor's board is revived to manage the company until confirmation

Explanation

Section 22(5) provides that where the Board does not confirm the proposed name within ten days of receipt, the Adjudicating Authority shall by order direct the IRP to continue to function as RP until the Board confirms the proposed RP's appointment. There is no deemed appointment and no suspension of the process. The insolvency process continues without a gap.

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