Insolvency and Bankruptcy Code, 2016 (IBC) is a robust legal framework that encompasses varied aspects. It is a bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. This law is considered one of the biggest insolvency reforms in the economic history of India. It primarily aims at resolving a company that is not able to pay its debts, this process is a resolution process. It was enacted for reorganization and insolvency resolution of corporate persons, partnership firms, and individuals in a time-bound manner for maximization of the value of assets of such persons. But in case a company is unable to get resolved, it goes into liquidation. Similarly in the case of individuals or partnership firms, in case it’s not resolved, it goes into bankruptcy. There are various compliances at each stage, documentation, and representation that needs to be fulfilled with the adjudicating authority of the jurisdiction.
The Code has allowed financial creditors to have a significant role in the company, created opportunities for investment for investors, and led to significant litigations between parties. It has had an impact across various industrial sectors, ranging from real estate to the steel industry. The role of a lawyer is not limited to the litigation process alone but extends to advisory aspects and drafting of documents through every step of the insolvency process.
Insolvency and Bankruptcy Code, 2016 Legal essentials:
- Representation of creditors or debtors as well as the insolvency resolution professional in the court of law as and when required;
- Deliver strategic advice to asset reconstruction companies and restructuring the companies;
- Assessment of assets and liabilities of a stressed company and accordingly advising the risk involved in taking over businesses of stressed companies undergoing resolution process.
- Helping the Insolvency Resolution Professional (IRP) in setting up Committee of creditors, resolving queries of creditors, negotiating with parties along with IRP in having smooth resolution process;
- Becoming complete support to the IRP/RP in the process as and when required;
- The Lawyer shall ensure that any filing before NCLT is done in the prescribed form along with the relevant documents.
- The advocate advising the Financial Creditor shall ensure the existence of the debt, and that the application is filed in proper form and format in accordance with the requirements laid down under the Code.
- Not only this but the lawyer also drafts and vets the application to be filed before the NCLT
- The Legal Counsel acts as a medium between the CoC and the RP. All communication with the RP is first vetted by the Lawyer. Further, it shall review the Liquidation Report and shall ensure that the same is prepared to keep in mind all the laws and regulations under the IBC and IBBI.
How ASC Helps?
- Since it’s a law and involves a lot of compliances and representations with the adjudicating authority, a team of lawyers and advocates is a must.
- The expert team of lawyers, advocates, and insolvency professional will provide an opinion in matters of IBC
- Legal representation in courts and adjudicating authorities like NCLT, NCLAT
- Help in filing and compliances in the IBC matters
- Drafting of applications and notices as per the law
- Keeping updated with the latest amendments and advising accordingly
- Initiation of the insolvency resolution process and seeking relief before the NCLT for the benefit of clients
- The team supports a strategic combination of advisory and litigation throughout the course of the insolvency proceedings in order to safeguard their financial interests.
- Vetting and review of the documents, applications filed to the court, shared among various stakeholders keeping the IBC law in compliance.