IBC provisions of the Code & Regulations on Resolution Plan
- Under the Blog have brief details about the provisions of the Insolvency and Bankruptcy Code, 2016 & IBC Regulations made thereunder, in relation to the provision of Resolution Plans, its preparation, basic points to be contents along with approval
Provisions compliances under IBC Code Provision on Resolution Plan
Applicability of moratorium contains under the Proviso to Section 14(4) of the IBC Code:
- If at any time during the Corporate Insolvency Resolution Process period, if the Adjudicating Authorities approves the resolution plan under sub-section (1) of section 31, the moratorium shall cease to have effect from the date of such approval.
Definition of Resolution Plan provided U/s 5(26) of the IBC Code
- It means a plan proposed by bidder or resolution applicant for insolvency resolution of the corporate debtor as a going A resolution plan may include provisions for the restructuring of the corporate debtor, including by way of merger, amalgamation and demerger.
Duties of Resolution Professional contains under the Section 25(2)(h) of the IBC Code
- It is the duty of a Resolution Professional to invite prospective resolution applicants, who fulfill such criteria as may be laid down by him with the approval of committee of creditors, having regard to the complexity and scale of operations of the business of the corporate debtor and such other conditions as may be specified by the Board, to File a resolution
Preparation of Information Memorandum contains under the Explanation to Section 29(2)( c) of the IBC Code
- Relevant information in Information Memorandum means information to be given to bidder resolution applicants to make a resolution plan.
Ineligibility to be a Resolution Applicant contains under the Section 29A of the IBC Code
- A person shall not be eligible to submit a resolution plan if any conditions U/s 29A are
Ineligibility to be a Resolution Applicant contains under the Proviso to Section 29A(C) of the Insolvency and Bankruptcy Code, 2016
- A person can be eligible to submit resolution plan if such person makes payment of all overdue amounts with interest thereon and charges relating to nonperforming asset accounts before submission of resolution
Submission of resolution plan contains under the Section 30(1) of the Insolvency and Bankruptcy Code, 2016
- A resolution applicant (bidder) may submit a resolution plan [along with an affidavit stating that he is eligible U/s 29A] to the resolution professional prepared on the basis of the information
Contents of a Resolution Plan contains under the Section 30(2) of the IBC Code
The Insolvency professional shall examine each resolution plan received by him to confirm that each resolution plan
- provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the payment of other debts of the corporate debtor;
- provides for the payment of debts of operational creditors in such manner as may be specified by the Board
- provides for the management of the affairs of the Corporate debtor after approval of the resolution plan;
- The implementation and supervision of the resolution plan;
- does not contravene any of the provisions of the law for the time being in force
- confirms to such other requirements as may be specified by the Board.
Approval of the Plan contains under the Section 30(3) and 30(4) of the IBC Code
- Resolution professional shall present to the committee of creditors for its approval such resolution plans which confirm the conditions
- Committee of creditors may approve a resolution plan by a vote of not less than 66%. of voting share of the financial creditors, after considering its feasibility and viability, the manner of distribution proposed, which may take into account the order of priority amongst creditors, including the priority and value of the security interest of a secured
Note: The plan should not be submitted by anyone ineligible U/s 29A.
Meeting of Approval contains under the Section 30(5) of the Insolvency and Bankruptcy Code, 2016
- Resolution applicant may attend the meeting of the committee of creditors in which the resolution plan of the applicant is The resolution applicant shall not have a right to vote at the meeting of the committee of creditors unless such resolution applicant is also a financial creditor.
- Resolution professional shall submit the resolution plan as approved by the committee of creditors to the Adjudicating
Approval of the plan contains under the Section 31 of the IBC Code
- If the Adjudicating Authorities is satisfied that the resolution plan as approved by the committee of creditors as per terms of Section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, including the Central Govt, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution
Combination in Resolution Plan contains under the Proviso to Section 31(4) of the IBC Code
- Where the resolution plan contains a provision for combination, as referred to in section 5 of the Competition Act, 2002, the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors.
Appeal contains under the Section 32 of the Code
- Any appeal from an order approving the resolution plan shall be in the manner and on the grounds laid down in Section 61(3) the Insolvency and Bankruptcy Code.
Grounds of appeal against the Resolution Plan contains under the Section 61(3) of the The Insolvency and Bankruptcy Code, 2016
- There has been material irregularity in exercise of the powers by the resolution professional during the corporate insolvency resolution
- Approved resolution plan is in contravention of the provisions of any law for the time being in force.
- Debts owed to operational creditors of the corporate debtor have not been provided for in the resolution plan in the manner specified by the
- Insolvency resolution process costs have not been provided for repayment in priority to all other debts; or
- Resolution plan does not comply with any other criteria specified by the
Criminal proceedings against corporate debtor contains under the Section 32A(2) of the IBC Code
- No action shall be taken against the property of the corporate debtor in relation to an offence committed prior to the commencement of the corporate insolvency resolution process of the corporate debtor, where such property is covered under a resolution
Liquidation contains under the Section 33 of the IBC Code
- Liquidation proceedings will be initiated if resolution plan fails to get
Punishment for contravention if of resolution plan contains under the Section 74(3) of the IBC Code
- Where the corporate debtor, any of its officers or creditors or any person on whom the approved resolution plan is binding U/s 31 the Insolvency and Bankruptcy Code, knowingly and willfully contravenes any of the terms of such resolution plan or abets such contravention, such corporate debtor, officer, creditor or person shall be punishable with imprisonment of not less than one year, but may extend to five years, or with fine which shall not be less than one lakh rupees, but may extend to one crore rupees, or with both.
IBC Regulations on Resolution Plan
Invitation for Expression of Interest contains under the Reg. 36A of the IBBI (Corporate Insolvency Resolution Process) Regulations, 2016
- The resolution professional shall publish IBC Form G for interested and eligible prospective resolution applicants to File resolution
Resolution Plan contains under the Reg. 37 of the IBBI(Corporate Insolvency Resolution Process) Regulations, 2016
- A resolution plan shall provide for the measures, as may be necessary, for insolvency resolution of the corporate debtor for maximization of value of its
Request for Resolution Plans contains under the Reg. 36B of the IBBI (corporate insolvency resolution process) Regulations, 2016
- The resolution professional shall issue the information memorandum, evaluation matrix and a request for resolution plans, within five days of the date of issue of the provisional list of prospective resolution
- The request for resolution plans shall detail each step in the process, and the manner and purposes of interaction between the resolution professional and the prospective resolution applicant, along with corresponding
Mandatory Contents of Resolution Plan contains under the Reg. 38 of the IBBI(Corporate Insolvency Resolution Process) Regulations, 2016
- The contents that are to be included in the resolution plan including but not Ltd. to a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor, the entire payment plan and its implementation
Approval of Resolution Plan contains under the Reg. 39 of the IBBI (Corporate Insolvency Resolution Process) Regulations, 2016
- A prospective bidder or resolution applicant in the final list may file resolution plan or plans prepared in accordance with the Insolvency and Bankruptcy Code, 2016 and these regulations to the resolution professional electronically within the time given in the request for resolution plans under regulation 36B.
- The resolution professional shall endeavour to file the resolution plan approved by the committee to the Adjudicating Authority at least fifteen days before the maximum period for completion of corporate insolvency resolution process u/s 12, along with a compliance certificate (IBBI – Form H)
Approval of Resolution Plan by Committee of Creditors contains under the Reg. 39(3) of the IBBI (Corporate Insolvency Resolution Process) Regulations, 2016
- The committee shall evaluate the resolution plans received under regulation 39(1) strictly as per the evaluation matrix to identify the best resolution plan and may approve it with such modifications as it deems
Meeting Liquidation Cost contains under the Reg. 39B of the IBBI (Corporate Insolvency Resolution Process) Regulations, 2016
- While approving a resolution plan, the committee may make a best estimate of the amount required to meet liquidation costs, in consultation with the Insolvency
Assessment of sale as a going concern contains under the Reg. 39C of the IBBI (Corporate Insolvency Resolution Process) Regulations, 2016
- While approving a resolution plan, the committee may recommend that the liquidator may first explore sale of the corporate debtor as a going