Insolvency Process Versus Liquidation

Confused between the Insolvency Process & Liquidation? The procedure and differences between Insolvency Process and Liquidation is explained.

6 Steps of Corporate Insolvency Process

CIRP is a process to determine the capability of repayment of the defaulted corporate. For this purpose, IRPs are appointed. They evaluate the assets and liabilities to determine the capability of repayment.

The Corporate Guarantor can initiate CIRP against the Corporate Debtor under “Right to subvention”

Proceeding against the Corporate Debtor for the recovery of the dues and hence can file a petition against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the Adjudicating Authority.

The Insolvency and Bankruptcy Code, 2016 is not Interest Recovery Code

NCLT held that the “interest” component alone cannot be claimed or pursued, in absence of the debt, to trigger a CIRP against the corporate Debtor. Further, the application pursued realization of the interest amount alone is against the intent of the IBC, 2016.

Corporate Debtor cannot be blamed for delay in delivery of possession when delay occurs due to Force Majeure

Whether the delay in delivering possession is due to the Corporate Debtor & in case the delay is not due to the Corporate Debtor, but force majeure, it cannot be alleged that the Corporate Debtor has defaulted in delivering the possession.

Employee Benefits Constitute Operational Debt

A claim was made in respect of the non-payment of pending salary and other settlement benefits such as leave encashment, Leave Travel Allowance, and bonus.

Claims towards the lease of immovable property do not fall within the definition of Operational Debt under IBC

NCLAT, New Delhi Bench has held that claims towards rent of leasehold property do not fall within the definition of the operational debt under IBC.

Amount paid towards lease of immovable property not an Operational Debt- NCLAT

Claims towards rent of leasehold property do not fall within the definition of the operational debt in terms of Section 5(21) of the Insolvency and Bankruptcy Code, 2016.

Role of Information Utility and NeSL in safeguarding Insolvency Process under the IBC

The NeSL was the first Information Utility service registered under the BBI Regulations, 2017 it is one of the three pillars of the IBC system.

Recovery of Money in a Speedy Manner

Money matters are a sensitive issue for everyone involved in the business as nobody would want to leave or lose their hard-earned money like that.

How Insolvency can be initiated by corporate debtor against itself?

How can a corporate person file for insolvency? the insolvency process for section 10 application, the fees, documents required and other details required to file such an insolvency petition.

Recovery under SEBI cannot take place during the moratorium period

Under section 14 of the code, the moratorium order is passed. Accordingly till the time moratorium period exists no other action or suit or case or proceedings against the corporate debtor can take place.

Pendency of proceedings before debt recovery tribunal cannot affect the petition under 7 of IBC

If some other recovery proceedings are pending or the amount of claim is disputed before other tribunal or adjudicating body that won’t empower the adjudicating authority to reject the petition.

Withdrawal of admitted Insolvency process/petition Essar Steel Case

An insolvency petition admitted u/s 7, 9 or 10 can only be withdrawn by the appellant with approval from 90% of the creditors.