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

Under section 54E, on the pre-packaged insolvency commencement date the Adjudicating Authority admits the application of Tara Metals Ltd. The insolvency professional named in the application has a disciplinary proceeding pending against him. Which course does the Code prescribe for appointing the resolution professional?

The Adjudicating Authority appoints the resolution professional on the recommendation of the Insolvency and Bankruptcy Board, because a disciplinary proceeding is pending against the named professional. Only where no such proceeding is pending is the professional named in the application appointed.

  1. AThe Adjudicating Authority appoints the professional named in the application regardless of the pending proceeding
  2. BThe corporate debtor's board appoints a replacement of its choice
  3. CThe financial creditors appoint a replacement by a fresh vote
  4. DThe Adjudicating Authority appoints a resolution professional based on the recommendation of the BoardCorrect

Explanation

Section 54E(1)(b) provides that the named professional is appointed if no disciplinary proceeding is pending. If one is pending, the appointment is based on the recommendation made by the Board. The debtor's board or creditors have no power to choose in that situation.

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