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CS Professional · Corporate Restructuring, Valuation and Insolvency · Pre-Packaged Insolvency Resolution Process

The pre-packaged insolvency commencement date for Bharat Components Ltd is 10 January. By 9 April (ninety days later) the committee of creditors has not approved any resolution plan. What must the resolution professional do?

If the committee of creditors approves no plan within ninety days of commencement, the resolution professional must file an application for termination with the Adjudicating Authority on the day after that period expires, not wait for the 120-day limit.

  1. AWait until the 120th day and then apply for termination
  2. BFile an application for termination of the process on the day after expiry of the ninety-day periodCorrect
  3. CConvert the process into a corporate insolvency resolution process without any order
  4. DExtend the process by ninety days on his own decision

Explanation

Under section 54D(3), where no plan is approved within the ninety-day period in section 54D(2), the resolution professional must file a termination application on the day after that period expires. Waiting until day 120 is wrong, and the Code gives no power of self-extension or automatic conversion here.

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