Expert Insolvency and Bankruptcy Lawyers in Mohali, Chandigarh & Panchkula - NCLT Specialists

The Insolvency and Bankruptcy Code, 2016 (IBC) is a comprehensive legislation that consolidates and amends laws relating to reorganization and insolvency resolution of corporate persons, partnership firms, and individuals. It provides a time-bound process for resolving insolvency and recovery of debts, overseen by the National Company Law Tribunal (NCLT).

At Metis Law Chamber, we have successfully handled over 120 insolvency and bankruptcy cases before NCLT and NCLAT, recovering more than ₹45 crores for creditors and stakeholders. Our experienced IBC lawyers provide comprehensive legal assistance in corporate insolvency resolution processes, liquidation proceedings, and debt restructuring with a proven 75% success rate.

Key Objectives of IBC:

• Time-Bound Resolution: 330-day maximum timeline for resolution process
• Creditor Control: Committee of creditors drives the resolution process
• Value Maximization: Maximize asset value for all stakeholders
• Professional Management: Insolvency professionals manage the process
• Revival Priority: Business revival prioritized over liquidation
• Consolidated Framework: Single code replacing multiple laws

IBC covers various types of insolvency proceedings for different entities and situations:

Corporate Insolvency Resolution Process (CIRP):

• Financial Creditor Petition: Filed by banks, financial institutions, bondholders
• Operational Creditor Petition: Filed by suppliers, vendors, service providers
• Corporate Debtor Petition: Voluntary insolvency by the company itself
• Resolution Plan: Revival and restructuring of financially distressed companies
• Liquidation: Winding up when resolution fails or is not feasible

Individual Insolvency (Fresh Start & Insolvency Resolution):

• Fresh Start Process: For individuals with limited assets and income
• Individual Insolvency Resolution: For individuals with significant assets
• Partnership Firm Insolvency: Insolvency of partnership firms
• Proprietorship Insolvency: Individual entrepreneur insolvency

Voluntary Liquidation:

• Members Voluntary Liquidation: Solvent companies choosing to wind up
• Creditors Voluntary Liquidation: Insolvent companies voluntarily liquidating
• Fast Track Liquidation: Expedited process for specific company types

Cross-Border Insolvency:

• UNCITRAL Model Law: Recognition of foreign insolvency proceedings
• Cooperation Mechanisms: Coordination with foreign courts and professionals
• Asset Recovery: Recovery of assets located in different jurisdictions

IBC defines specific rights and roles for different stakeholders in insolvency proceedings:

Financial Creditors:

• Definition: Banks, NBFCs, bondholders, and other lenders with financial debt
• Rights: Initiate CIRP, voting rights in CoC, recovery priority
• Powers: Approve resolution plans, replace RP, decide on liquidation
• Representation: Form majority in Committee of Creditors
• Documentation: Financial agreements, loan documents, security creation

Operational Creditors:

• Definition: Suppliers, vendors, employees, service providers
• Rights: Initiate CIRP, receive notice of proceedings, file claims
• Limitations: No voting rights in CoC, limited role in decision making
• Protection: Moratorium protection, priority in liquidation waterfall
• Evidence: Invoices, supply agreements, service contracts

Corporate Debtor:

• Rights: File voluntary petition, propose resolution plan (with restrictions)
• Suspension: Management powers suspended during CIRP
• Cooperation: Provide information and assistance to RP
• Restrictions: Cannot dispose assets or enter new contracts

Resolution Professional:

• Appointment: Licensed insolvency professional appointed by CoC
• Powers: Manage corporate debtor, conduct resolution process
• Duties: Maximize asset value, maintain corporate debtor as going concern
• Responsibilities: Invite resolution plans, coordinate with stakeholders

Other Stakeholders:

• Employees: Dues priority, consultation rights, employment protection
• Government: Tax dues, regulatory compliance, public interest
• Shareholders: Residual rights after creditor satisfaction
• Guarantors: Personal guarantee enforcement, asset attachment

Resolution plans are comprehensive proposals to revive financially distressed companies:

Resolution Plan Requirements:

• Payment Terms: Details of payments to creditors and timeline
• Management Structure: Proposed management and governance structure
• Business Plan: Operational plan for company revival
• Financial Projections: Revenue, profitability, and cash flow projections
• Compliance Plan: Regulatory and legal compliance strategy
• Implementation Timeline: Milestones and monitoring mechanisms

Eligibility Criteria for Bidders:

• Connected Persons: Promoters, related parties generally ineligible
• Willful Defaulters: Banks' willful defaulters cannot bid
• Disqualified Persons: Persons disqualified under various laws
• Criminal Convictions: Persons convicted of specific offenses
• Undischarged Insolvents: Persons undergoing insolvency proceedings

Evaluation Criteria:

• Feasibility: Viability of business plan and financial projections
• Recovery Amount: Total payments to creditors and stakeholders
• Timeline: Speed of implementation and creditor payments
• Employment: Job preservation and creation plans
• Legal Compliance: Adherence to applicable laws and regulations

Approval Process:

• CoC Approval: 66% majority voting by financial creditors
• NCLT Approval: Tribunal approval after CoC endorsement
• Implementation: Plan execution under RP/monitoring committee supervision
• Monitoring: Regular compliance reporting and milestone tracking

When resolution fails or is not feasible, companies undergo liquidation for asset realization:

Liquidation Triggers:

• No Resolution Plan: No viable resolution plan received or approved
• CoC Decision: 66% majority voting for liquidation over resolution
• Plan Failure: Approved resolution plan fails during implementation
• NCLT Order: Tribunal orders liquidation in specific circumstances

Liquidation Process Steps:

• Liquidator Appointment: NCLT appoints liquidator to manage assets
• Asset Identification: Complete inventory of corporate debtor assets
• Asset Valuation: Professional valuation of all identified assets
• Stakeholder Verification: Verification and admission of all claims
• Asset Sale: Sale through public auction, private treaty, or slump sale
• Distribution: Proceeds distribution as per liquidation waterfall

Liquidation Waterfall (Distribution Priority):

1. Insolvency Resolution Process Costs: CIRP and liquidation expenses
2. Workmen Dues: Two years preceding liquidation commencement
3. Secured Creditors: Against assets subject to security interest
4. Employee Dues: One year wages and unpaid dues
5. Unsecured Creditors: Financial and operational creditors
6. Government Dues: Tax and regulatory dues
7. Remaining Debts: Other claims and liabilities
8. Preference Shareholders: Preference share capital
9. Equity Shareholders: Equity share capital and surplus

Asset Sale Methods:

• Public Auction: Transparent bidding process for asset sale
• Private Treaty: Negotiated sale to specific buyers
• Slump Sale: Sale of business as going concern
• E-Auction Platform: Online bidding for wider participation

IBC has undergone several amendments to address practical challenges and improve efficiency:

2020 Amendment Highlights:

• COVID-19 Relief: Suspension of fresh insolvency proceedings for defaults during COVID-19
• Minimum Threshold: Increased minimum default threshold from ₹1 lakh to ₹1 crore
• MSME Protection: Special provisions for micro, small and medium enterprises
• Resolution Plan Immunity: Protection from prosecution for past actions

Supreme Court Landmark Judgments:

• Essar Steel Case: Distribution of amounts under approved resolution plans
• Jaypee Infratech: Homebuyers as financial creditors with voting rights
• Swiss Ribbons: Constitutional validity of IBC provisions upheld
• Videocon Industries: Fraudulent transactions and resolution plan approval

Regulatory Developments:

• IBBI Regulations: Detailed procedural regulations for smooth implementation
• Prepack Scheme: Introduction of pre-packaged insolvency resolution
• Cross-Border Framework: Rules for cross-border insolvency cooperation
• Digital Processes: Online filing and virtual hearings implementation

Institutional Infrastructure:

• NCLT Benches: Expansion of NCLT benches across India
• Insolvency Professionals: Growing network of licensed IPs
• Information Utilities: Digital platforms for financial information
• Training Programs: Capacity building for professionals and judiciary

Don't let financial difficulties destroy your business or investment. Our experienced insolvency lawyers have successfully handled 120+ IBC cases before NCLT, recovering over ₹45 crores for stakeholders. Whether you're a creditor seeking recovery or a company needing restructuring, we provide strategic legal solutions under the Insolvency and Bankruptcy Code.

Complete Insolvency & Bankruptcy Services:

• CIRP Petitions: Filing and defending corporate insolvency resolution process petitions
• Resolution Plans: Drafting, evaluation, and approval of comprehensive revival plans
• Liquidation Proceedings: Managing corporate liquidation and asset realization processes
• Creditor Representation: Protecting financial and operational creditor interests
• NCLT & NCLAT Practice: Expert advocacy before insolvency tribunals
• Due Diligence: Comprehensive asset and liability assessment for stakeholders
• Compliance & Advisory: IBC compliance and strategic insolvency planning

Proven NCLT Expertise: 120+ IBC cases handled with 75% success rate and ₹45+ crores recovered for clients. When facing insolvency challenges, trust experienced specialists who understand the complexities of IBC law and NCLT procedures.