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CS Professional · Corporate Restructuring, Valuation and Insolvency · Resolution Strategies

Under a pre-packaged process, the CoC of Narmada Foods Ltd votes on a resolution plan. Voting shares total 100 and the votes in favour are 65. What is the position under Section 54K(13)?

The plan is not approved. Section 54K(13) requires not less than sixty-six per cent of the voting shares, and 65 per cent falls short of that threshold. A simple majority or near two-thirds is not enough.

  1. AThe plan is approved because a simple majority is enough
  2. BThe plan is approved because 65 per cent is nearly two-thirds
  3. CThe plan is not approved because at least sixty-six per cent of voting shares is requiredCorrect
  4. DThe plan is approved if the operational creditors agree

Explanation

Section 54K(13) requires a vote of not less than sixty-six per cent of the voting shares. 65 is below 66, so the plan fails. Rounding to 'nearly two-thirds' is not permitted by the text.

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