RESTRUCTURING & INSOLVENCY
Restructuring and insolvency in India are governed by a robust legal framework that aims to provide a time-bound and effective resolution process for financially distressed companies. The introduction of the Insolvency and Bankruptcy Code (IBC) in 2016 marked a significant overhaul of the previous insolvency laws, creating a more streamlined and efficient process for restructuring and insolvency proceedings.
Insolvency and Bankruptcy Code (IBC), 2016
The Code was introduced to consolidate and amend the laws relating to the reorganization and insolvency resolution of corporate persons, partnership firms, and individuals in a time-bound manner. The IBC provides a framework for initiating a Corporate Insolvency Resolution Process (CIRP) against a defaulting debtor. It involves the appointment of an Insolvency Professional (IP) who manages the debtor’s assets and the formation of a Committee of Creditors (CoC) that decides on the resolution plan.
Pre-Packaged Insolvency Resolution Process (PPIRP)
Introduced for Micro, Small, and Medium Enterprises (MSMEs), the PPIRP aims to provide a faster and less disruptive alternative to the standard CIRP. It allows for a debtor to submit a pre-agreed resolution plan to the National Company Law Tribunal (NCLT), which is then approved by the CoC. The process is quicker and involves fewer disruptions to the debtor’s business operations.
Liquidation Process
If a resolution plan is not approved within the prescribed time frame, the company enters liquidation. The liquidation process under the IBC is designed to maximize the value of the assets for the benefit of all stakeholders. The liquidator, appointed by the NCLT, is responsible for selling the assets and distributing the proceeds among creditors according to the priority of claims.
Our Role:
Restructuring and insolvency law in India has undergone significant transformation with the advent of the IBC. While the framework is designed to provide a time-bound and efficient resolution to financial distress, challenges remain in the form of judicial delays, creditor conflicts, and evolving jurisprudence. Arvind Attorneys is well-equipped to assist clients in navigating these challenges, providing expert legal services across the spectrum of restructuring and insolvency proceedings.
Whether through advising on strategic restructuring, representing clients in insolvency proceedings, or managing liquidation processes, our firm is committed to delivering effective and timely solutions that protect and maximize value for all stakeholders.