IBC & NCLT Advisory

Insolvency and Bankruptcy Code (IBC) and the National Company Law Tribunal (NCLT) advisory involves providing guidance on matters related to corporate insolvency and bankruptcy proceedings in India. The IBC provides a framework for resolving insolvencies and bankruptcies efficiently, and the NCLT is the adjudicating authority for these matters.

Insolvency and Bankruptcy Code (IBC)

The IBC, enacted in 2016, is a comprehensive code designed to streamline the insolvency resolution process for companies and individuals. Key aspects include:

Objectives:

Timely Resolution: Facilitate the resolution of insolvency cases within a specified period.

Maximize Value: Ensure that the value of the insolvent entity is maximized.

Fair Recovery: Balance the interests of creditors and stakeholders.

Key Processes:

Corporate Insolvency Resolution Process (CIRP): A process initiated when a company defaults on its debt. It involves:

Initiation: Filing of a petition by creditors or the company itself.

Resolution Plan: Preparation and approval of a resolution plan by the Committee of Creditors (CoC).

Resolution: Implementation of the resolution plan or liquidation if a resolution is not feasible.

Liquidation: Process to wind up the company's affairs if no resolution plan is approved.

Components:

Insolvency Professional: A licensed professional who manages the resolution process.

Committee of Creditors (CoC): A group of financial creditors who evaluate and approve the resolution plan.

Resolution Applicant: An individual or entity that submits a resolution plan for the distressed company.

Key Provisions:

Moratorium: A temporary suspension of debt recovery actions during the resolution process.

Fast-Track Insolvency: A streamlined process for smaller companies and specific situations.

Cross-Border Insolvency: Provisions for dealing with insolvencies that involve assets or creditors in multiple jurisdictions.

National Company Law Tribunal (NCLT)

The NCLT is a quasi-judicial body established under the Companies Act, 2013, to adjudicate matters related to company law, including insolvency and bankruptcy. Its key functions include:

Jurisdiction:

Insolvency and Bankruptcy Matters: Adjudicating petitions related to insolvency and bankruptcy under the IBC.

Company Law Matters: Resolving disputes related to company management, corporate governance, and shareholder issues.

Other Matters: Handling cases related to mergers, demergers, and corporate restructuring.

Structure:

Benches: The NCLT has various benches across India, including a Principal Bench in New Delhi and Regional Benches in major cities.

Members: Comprises Judicial Members (retired High Court judges) and Technical Members (experts in finance, law, and company matters).

Procedures:

Petition Filing: Filing of petitions related to insolvency, company disputes, and other matters.

Hearings: Conducting hearings and adjudicating cases based on evidence and submissions.

Orders: Issuing orders and directions in relation to insolvency, liquidation, and corporate governance issues.

Advisory Services in IBC & NCLT Matters

Insolvency Advisory:

Process Guidance: Advising on the initiation and management of the CIRP or liquidation process.

Resolution Planning: Assisting in the preparation and submission of resolution plans.

Debt Restructuring: Providing advice on restructuring options and negotiations with creditors.

Compliance and Representation:

Regulatory Compliance: Ensuring compliance with the provisions of the IBC and related regulations.

Representation: Representing clients before the NCLT in insolvency, company law, and other matters.

Strategic Advice:

Risk Assessment: Identifying and assessing risks associated with insolvency and bankruptcy.

Stakeholder Management: Advising on stakeholder interactions and negotiations.

Litigation Support:

Dispute Resolution: Providing support in resolving disputes related to insolvency, corporate governance, and company law.

Appeals: Assisting with appeals and challenges against NCLT orders.