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CS Professional · Corporate Restructuring, Valuation and Insolvency · Preparation and Approval of Resolution Plan

The committee of creditors of Lotus Foods Ltd is approving a resolution plan and proposes a monitoring committee including the resolution professional. Which statement is correct under Regulation 38(4)?

The monitoring committee submits quarterly reports to the Adjudicating Authority, and if the resolution professional is a member, the monthly fee cannot exceed what he received during CIRP. Regulation 38(4) only requires the committee to consider setting one up.

  1. AThe committee must set up a monitoring committee and it must report annually
  2. BThe monitoring committee reports quarterly to the Adjudicating Authority, and the RP's monthly fee must not exceed that received during CIRPCorrect
  3. CThe monitoring committee can include only the resolution professional
  4. DThe RP's fee as a member may be fixed freely by the applicant

Explanation

Regulation 38(4) says the committee shall consider setting up a monitoring committee, not that it must. Members may include the RP, another IP or others. The RP's monthly fee cannot exceed that received in CIRP, and quarterly reports go to the Adjudicating Authority.

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