Need to check what are the rights of creditors in the company and their sharing ratio. Kindly review the terms and conditions of the company.
Committee 0f creditors of company a ( under cirp ) decided to fund initial resolution professional expenses on prorata basis as per their percentage of voting right . if any or more of coc member do not fund such expenses , can the defaulting member be terminated from coc ?
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Need to check what are the rights of creditors in the company and their sharing ratio. Kindly review the terms and conditions of the company.
If one or more of coc members fail to pay such expenses The IRP/RP, being an appointed officer of the court, on behalf of the creditors, runs the complete process of the CIRP of a Corporate Debtor and in case there is any discrepancy/difficulty being countered by him he may approach the Adjudicating Authority with an application seeking appropriate directions.
The COC member cannot be terminated the lead member shall bear the expenses and shall raise same in meeting and he can recover same from the debtor. As per IBC when the amount from debtor company shall be disbursed firstly the amount of IRP expense shall be given.
Yes
the committee of creditors is formed so as to give instructions to the IRP to take various steps to prevent the defaulter company from going into liquidation
the IRP has to take various steps and incur expenses
therefore his professional fees have to be borne by all the creditors in proportion to their voting rights proportionate with their debt claim
it would not be fair that a creditor can be on a COC, reap the benefits of the resolution process and also not bear the expenses of the IRP
However it is to be seen that the resolution of removing a non paying creditor must not be passed by the other creditors on the committee in order to remove that creditor having the highest voting share in order to defeat his stay
an application can be made by the IRP to the NCLT bench to give directions to the non paying creditor to pay his pro rata share in the professional fees of the IRP
Hi,
The defaulting member may be terminated through a resolution passed by board of directors in general meetings.
A creditors' committee is a group of people who represent a company's creditors in a bankruptcy proceeding. As such, a creditors' committee has broad rights and responsibilities, including devising a reorganization plan for bankrupt companies or deciding whether they should be liquidated.
A trustee is responsible for selecting an odd number of committee members, who act as fiduciaries representing all creditors, not just their interests. Creditors' committees may enlist professional advice as part of their work, such as accountants, legal counsel, appraisers or other professional assistance. Such professional help is paid for by the debtor's estate and not by the creditors.
Therefore you may throw more light on your question as to what you want to clarify.