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CS Professional · Corporate Restructuring, Valuation and Insolvency · Convening and Conduct of Meetings of Committee of Creditors

Under the Code's provisions on repayment-plan meetings of creditors of an individual debtor, Mr Rao, a secured creditor wants to vote but also keep his right to enforce security. What must he do?

He must submit an affidavit to the resolution professional at the meeting stating that his voting right relates only to the unsecured part of the debt and giving its estimated value. Without it, voting forfeits his right to enforce security during the repayment plan period.

  1. ANothing; he may vote for the whole debt and still enforce security
  2. BSubmit an affidavit to the resolution professional at the meeting stating that his vote is only for the unsecured part and its estimated valueCorrect
  3. CVote only through an authorised representative
  4. DAbstain, as secured creditors cannot vote

Explanation

Under section 110, a secured creditor who votes forfeits the right to enforce security during the plan period. To retain it, he must submit an affidavit stating that his vote relates only to the unsecured part and giving its estimated value, and the secured and unsecured parts are then treated as separate debts.

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