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CS Professional · Corporate Restructuring, Valuation and Insolvency · Documentation - Merger and Amalgamation

Under a fast-track merger, Narmada Ltd (transferor) and Tapti Ltd (transferee) convene a creditors' meeting. Which statement matches the statutory requirement for creditor approval?

Creditors must approve by a majority representing nine-tenths in value, either at a meeting convened on twenty-one days' notice accompanied by the scheme, or by written approval. Lower thresholds or different notice periods do not satisfy the fast-track provision.

  1. AMajority representing nine-tenths in value of creditors or class of creditors, at a meeting called on twenty-one days' notice with the scheme, or approved in writingCorrect
  2. BMajority in number representing three-fourths in value, on fourteen days' notice
  3. CUnanimous consent of all secured creditors only
  4. DSimple majority in value of creditors, on thirty days' notice

Explanation

Section 233(1)(d) requires approval by a majority representing nine-tenths in value of the creditors or class of creditors, at a meeting convened by giving twenty-one days' notice along with the scheme, or otherwise approved in writing. The three-fourths figure belongs to the section 232 route.

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