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

Under a pre-packaged insolvency resolution process for Orion Pharma Ltd, the CoC, before approval of the resolution plan, resolves to initiate a regular CIRP. Which vote is required for this resolution under section 54-O?

The committee of creditors must pass the resolution by a vote of not less than 66% of the voting shares, and the corporate debtor must be eligible for CIRP under Chapter II. This can be done before the resolution plan is approved in the pre-packaged process.

  1. AMajority of the voting shares
  2. BNot less than 66% of the voting sharesCorrect
  3. CUnanimous vote of all members
  4. DNot less than 90% of the voting shares

Explanation

Section 54-O(1) permits the CoC, after the pre-packaged insolvency commencement date but before plan approval, to resolve by a vote of not less than sixty-six per cent of voting shares to initiate CIRP, if the debtor is eligible under Chapter II. A bare majority is insufficient.

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