A personal guarantor to a corporate debtor is subject to a bankruptcy order under the Insolvency and…
The bankruptcy trustee may sue in their official name under Section 151(c). The question concerns property already vested in the trustee under Section 154. Section 155…
Choose your answer
A personal guarantor to a corporate debtor is subject to a bankruptcy order under the Insolvency and Bankruptcy Code, 2016. Assuming the required approval has been obtained, who may sue in their official name to protect property that forms part of the bankruptcy estate?
Answer and explanation
Correct answer A
The bankruptcy trustee may sue in their official name under Section 151(c). The question concerns property already vested in the trustee under Section 154. Section 155 excludes certain assets from the estate. Section 153(b) requires the committee of creditors’ approval for the trustee to bring estate litigation.
Option feedback
Option A
Section 151(c) authorises the bankruptcy trustee to sue in their official name. Section 154 vests the bankruptcy estate in the trustee on appointment. Section 153(b) requires the committee of creditors’ approval for estate litigation.
Option B
The question concerns estate property vested in the trustee. Section 151(c) assigns the official litigation power to the trustee.
Option C
Lodging a claim first does not transfer the estate or confer the trustee’s power to sue under Section 151(c).
Option D
The committee has approval functions under Section 153. The trustee has the power to sue in their official name under Section 151(c).
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