Resolution Professional Support Services
Initiation of Corporate Insolvency Resolution Process
It is ideal to note that the ambit of winding up was previously covered by the Companies Act, 1956 / Companies Act, 2013. Following the enactment of the Insolvency Code in 2016, the new process that replaced the concept of winding up was termed as the Corporate Insolvency Resolution Process (CIRP). The process functions to resolve issues in relation to the defaulting companies within a reasonable period of time thereby maintaining the company as a whole. This insolvency resolution process has been widely covered under Chapter I of Part II of the Insolvency and Bankruptcy Code, 2016.
Who can initiate the CIRP
When default is committed by a corporate debtor (person who has taken the loan or the amount from a creditor or bank), the CIRP process can be initiated by means of filing an application before the Adjudicating Authority (NCLT) in the provided manner as prescribed in Insolvency and Bankruptcy Code 2016 and related rules & regulations. It is also ideal to note that CIRP can be initiated by a financial creditor as well and there is no bar on the same.
CIRP may be initiated by either:
- Financial creditor (FC) under Section 7.
- An operational creditor (OC) under Section 9.
- A corporate applicant of a corporate debtor under Section 10 of the Code.
Consequences of Initiation of Cirp
- Revival of the corporate debtor, or
- Liquidation.
It is important to note that the underlying purpose of the IBCode of 2016 is to go with the first consequence that is a revival of corporate debtors. Only when the same is not in favour, liquidation is called for. Revival can further lead to a restructuring of the existing set-up or a new plan of ownership that needs to be implemented.
“My Rupee Mantra” experts provide the consultancy to all the stake holders in initiation of Corporate Insolvency Resolution Process which include.
- Drafting and issue of Notices under Section 8 of IBC 2016 on behalf of operation creditors
- Drafting of application to be filed before Hon’ble National Company Law Tribunal on behalf of Corporate Debtor, Operational Creditors, Home Buyers and other stake holders.
- Filing of application with the concerned bench of Hon’ble National Company Law Tribunal.
- Follow up and pleading of application filed with NCLT on behalf of the concerned applicant.
- Drafting of application for appeal to be filed before the Hon’ble National Company Law Appellate Tribunal.
- Follow up at various levels.
