1) Which of the following is/are true regarding Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016?
1) Liquidator should not ordinarily sell the assets through auctions.
2) Regulations allow insolvency professional from acting as a liquidator for a corporate debtor even if he is not independent of the corporate debtor.
a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
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Answer
Explanation
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ANSWER: Neither 1 nor 2
Explanation:
- The Regulations provide that a liquidator should ordinarily sell the assets through auctions.
- He/ She may sell the assets through private sale only when the asset is perishable; the asset is likely to deteriorate in value significantly if not sold immediately or the asset is sold at a price higher than the reserve price of a failed auction.
- He/ She may sell an asset on standalone basis or assets in a slump sale, assets in parcels or a set of assets collectively.
- Regulations prohibit an insolvency professional from acting as a liquidator for a corporate debtor if he is not independent of the corporate debtor.
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