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Insolvency & Bankruptcy

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Insolvency & Bankruptcy

Insolvency & Bankruptcy

Under the Insolvency and Bankruptcy Code of 2016, the Insolvency and Bankruptcy Board of India was constituted on October 1, 2016. (Code). It is a key pillar of the ecosystem responsible for the implementation of the Code that consolidates and amends the laws pertaining to reorganization and insolvency resolution of corporate persons, partnership firms, and individuals in a time-bound manner to maximize the value of the assets of such persons, to promote entrepreneurship, the availability of credit, and to balance the interests of all the stakeholders.

It is a unique regulator in that it regulates both a profession and procedures. It governs Insolvency Practitioners, Insolvency Professional Agencies, Insolvency Professional Entities, and Information Utilities. In accordance with the Bankruptcy Code, it creates and enforces rules for corporate insolvency resolution, corporate liquidation, individual insolvency resolution, and individual bankruptcy. In furtherance of the Code’s objectives, it was recently entrusted with fostering the growth of insolvency professionals, insolvency professional agencies and information utilities, and other institutions, as well as regulating their operations and practices. It has also been designated as the “Authority” under the Companies (Registered Values and Valuation Rules) of 2017 for regulating and advancing the profession of values in the nation.

AUTHORITIES OF INSOLVENCY PROFESSIONAL

Interim Resolution Professional in the Corporate Insolvency Resolution Process of any Corporate Debtor
Resolution Professional in the Corporate Insolvency Resolution Process of any Corporate Debtor
The liquidator in the Liquidation Process of any Corporate Debtor
The liquidator in the process of Voluntary Liquidation of a Corporate Debtor under section 59 of the Code
Resolution Professional in Fresh Start Process under Chapter II of the Code
Resolution Professional in Insolvency Resolution Process of Individuals, Proprietorship Concerns and Partnership Firms under Chapter III of the Code
Bankruptcy Trustee in the Bankruptcy process of any Individual or Partnership Firm

CORPORATE INSOLVENCY RESOLUTION PROCESS

Legal Door is providing numerous support services to its partners who have been appointed as Interim Resolution Professional or Resolution Professional in the Corporate Insolvency Resolution Process of any Corporate Debtor.

Fast Track Corporate Insolvency Resolution Process Team

Legal Door has developed a large team responsible for conducting various functions of Fast track Corporate Insolvency Resolution Process. The team consists of Law graduates, Company secretaries, Cost Accountants, experienced commerce graduates, chartered accountants, experienced accountants, computer operators, etc.

Legal Team

Legal Door provides complete legal support and advisory for understanding the various legal documents received by partners along with the claims and other documents sourced from Corporate Debtor. The legal team also support the partners of Insolvency Professional Entity for various provisions of Code and regulations made for Corporate Insolvency Resolution Process and liquidation processes.

Liquidation Process Team

The partners of Legal Door are being appointed as liquidator during Liquidation Process and Voluntary Liquidation Procedure and would also be appointed as Bankruptcy Trustee after the requirements of Individual bankruptcy are notified. Legal Door has separated the function of Liquidation Process and has trained a separate batch for the handling of Liquidation Process.

Fresh Start Process

When a company undergoes insolvency as a consequence of Insolvency and Bankruptcy Code (IBC), there is also a provision in IBC Code 2016, how and when a claimant can fresh start after undergoing Insolvency process.  Below are the prerequisite criteria for a person to apply for a fresh start after undergoing an insolvency process.

  • His gross annual income ought not to exceed more than sixty thousand rupees.
  • The total values of his assets should not exceed more than twenty thousand rupees.
  • The total value for his qualifying debt should not exceed thirty-five thousand rupees.
  • He should not be an undischarged bankrupt.
  • He should not own a dwelling unit.
  • No fresh start process should have been filed twelve months prior.

Bankruptcy Order

At the hearing of the petition, the court can issue a bankruptcy order against the judgment debtor. The courts must be content with the proof of debt, the act or bankruptcy and the service of the petition upon making the bankruptcy order.

The court makes a Bankruptcy order after the bankruptcy petition has been accessible. It is usually presented either by creditor’s petition or debtor’s petition. The bankruptcy order lets the Director-General of Insolvency (DGI) be the receiver of the debtor’s property. Upon the courts making the bankruptcy order against the judgment debtor, creditors whose debts are attestable in the bankruptcy shall have any remedy against the property or debtor in respect of the debt, nor are any legal proceedings commenced against the debtor without the leave of the courts.

Insolvency Resolution Process for Individuals and Partnership Firms:

The provisions and processes are designed keeping into account the need of the hour thereby providing a remedy in a time-bound method. Even though provisions have been drafted for the same but they are not being looked up to but other remedial measures are resorted to for seeking a remedy against individuals and partnership firms.

The provisions of the Insolvency Resolution Process for individuals & partnerships are alike to the extent of the corporate insolvency resolution process for corporate persons.

The major points of difference between the insolvency proceedings of corporate persons and individuals & partnership firms are that the application by corporate persons is filed with NCLT whereas application by individuals & partnership firms is filed with DRT.

How Legal Door helps?

  • Advisory and consultancy over IBC Matters
  • Appointment of IRP/RP, Liquidators, Bankruptcy Trustees
  • Claim Verification for verifying the claim of creditors
  • Drafting of Resolution Plan and Process Advisors
  • Creation and Maintenance of Cash Flow