Financial Creditors can Initiate Insolvency against Personal Guarantors under IBC
The new framework allows Creditors to continue recovery process with Personal Guarantor after completion of the Corporate Insolvency Resolution Process.
The new framework allows Creditors to continue recovery process with Personal Guarantor after completion of the Corporate Insolvency Resolution Process.
There has been no further clarification as to whether the home buyers are secured financial creditors or unsecured financial creditors, but in consideration of the recent developments, one thing is sure that the result will be in the interest of homebuyers only.
Home buyers are vital stakeholders in building projects. Many home buyers book their property in advance which helps builders raise funds for construction and development of the project.
The provisions Insolvency and Bankruptcy Code, 2016 specifically provides for treatment for all sums due to any workman or employee from the provident fund, the pension fund and the gratuity fund. Further, in the present scenario there is much debate on the admissibility of the claim of EPFO under Sections 7Q and 14B for which … Continue reading “Treatment and Priority of EPFO dues under Insolvency and Bankruptcy Code, 2016 (“IBC”)”
Interim Finance is defined under Section 5 (15) of the IBC, 2016 which means
The fast-track CIRP is designed to expedite the insolvency process for smaller companies and enable their efficient restructuring or liquidation.
Insolvency and Bankruptcy Code, 2016 brings in the concept of Interim Moratorium, which offers protection to individuals during the insolvency process.
Asset attachment by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA) is critical in combating money laundering and criminal activities.
The fast track process which can be initiated by a creditor or the corporate debtor itself cuts down the time taken to complete an insolvency resolution to almost half as compared to the regular process under the IBC.
the advance copy of the Application for initiating CIRP under Section 7, Section 9, or Section 10 of IBC, 2016 needs to be served to the Insolvency & Bankruptcy Board of India.
The IBC would prevail over The Customs Act, to the extent that once the moratorium is imposed in terms of Sections 14 or 33(5) of the IBC, as the case may be, the respondent authority has a limited jurisdiction to assess/determine the quantum of custom duty and other levies.
A key element that differentiates the IBC from previous legislation governing corporate insolvency is the distribution waterfall in the event of liquidation.
interim finance can be raised by the resolution professional appointed by the National Company Law Tribunal (NCLT). The resolution professional is authorized to raise interim finance after obtaining approval from the Committee of Creditors (CoC).
the Operational Creditors are only entitled for minimum of the Liquidation Value and NIL payment to Operational Creditors in case the Liquidation Value is NIL, does not contravene the provisions of Section 30(2)(b) of Insolvency & Bankruptcy Code, 2016.
The Corporate Debtor would carry on construction and out of total saleable construction 32% will be of landowner and remaining 68% will be of the Corporate Debtor.