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CS Professional · Insolvency and Bankruptcy - Law and Practice · Corporate Insolvency Resolution Process

Under a pre-packaged insolvency resolution process for Arjun Foods Ltd, the committee of creditors, before approval of the resolution plan, resolves by 70% of voting shares to initiate CIRP, and the resolution professional intimates the Adjudicating Authority. Which statement is correct?

The Adjudicating Authority must pass its order within thirty days of the resolution professional's intimation, and the corporate insolvency resolution process commences from the date of that order. The order is treated as an admission under section 7, with avoidance proceedings continuing.

  1. AThe Adjudicating Authority must pass its order within thirty days of the intimation, and CIRP commences from the date of that orderCorrect
  2. BThe Adjudicating Authority must pass its order within fourteen days, and CIRP is deemed to have commenced from the pre-packaged insolvency commencement date
  3. CThe order is deemed to be an admission under section 9, and pre-pack costs are excluded from CIRP costs
  4. DThe proceedings for avoidance of transactions lapse once the order is passed

Explanation

Section 54-O(2) gives the Adjudicating Authority thirty days from intimation to pass the order, and 54-O(4)(b) says CIRP commences from the date of such order. The order is deemed an admission under section 7, pre-pack costs are included in CIRP costs, and avoidance proceedings continue.

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