Skip to content

CS Professional · Corporate Restructuring, Valuation and Insolvency · Liquidation on or after Failing of Resolution Plan

Vindhya Textiles Ltd is in liquidation. The liquidator, after verifying a creditor's claim, decides to reject it in part. Which statement correctly describes what the liquidator must do?

The liquidator may admit or reject a claim wholly or partly. If rejecting, he must record written reasons and communicate the decision to both the creditor and the corporate debtor within seven days of the decision.

  1. ARecord in writing the reasons for the rejection and communicate the decision to the creditor and the corporate debtor within seven daysCorrect
  2. BCommunicate the decision to the creditor alone within fourteen days, without recording reasons
  3. CObtain prior approval of the Adjudicating Authority before rejecting any part of a claim
  4. DAdmit the whole claim, because a claim cannot be rejected partly

Explanation

The liquidator may admit or reject a claim in whole or in part. Where a claim is rejected, reasons must be recorded in writing. The decision must be communicated to both the creditor and the corporate debtor within seven days. Partial rejection is expressly permitted, so the last option is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Liquidation on or after Failing of Resolution Plan shows your real accuracy, how long you take and where you lose marks.

Practise Liquidation on or after Failing of Resolution PlanFree diagnostic mock

More Liquidation on or after Failing of Resolution Plan questions